Home > Rising Demand for Electric Vehicles and Minerals to Build Them

Rising Demand for Electric Vehicles and Minerals to Build Them

The fight against climate change continues unabated. Governments in the developed world favour green projects, with the electric vehicles market just one of the many that will expand dramatically in the years ahead.

The world as we know it is changing fast, and not only because of the new realities stemming from the COVID-19 pandemic. Even before that, society noticed the environmental impact of climate change and took action.

Europe is going green, thanks to its Green Deal pledge. It has vowed to implement projects to cut greenhouse gas emissions by at least 40% below the 1990s levels before 2030.

Furthermore, the aim is to reach at least a 32% share of renewable energy in the total energy mix. Finally, to reach at least 32.5% improvement in energy efficiency by the same 2030 deadline. Believe it or not, Europe is on track to achieve its targets.

But Europe is not the only one fighting climate change. The new US administration shifted from former President Trump’s policies and now is back at the forefront of fighting climate change.

Businesses, naturally, will have to adapt. And so will consumer behaviour. Green products and investments are favoured, are subsidised, and are increasing in popularity. According to a study by Deutsche Bank, battery electric vehicle penetration will reach over 40% in China and over 30% in Europe and the United States by 2030.

That’s a lot of cars to be built. Therefore, a massive industry shift is undergoing.

Demand for Minerals to Increase Exponentially

So far, Tesla, the most famous electric vehicle producer in the world, is leading the field. As such, the largest chunk of its profits come from selling carbon credits to other automakers which are behind the curve on electric vehicle production.

But things change fast. Volkswagen’s shares rose more than 100% in the first quarter of the year on the news of it investing massively in gigafactories to build batteries for its huge future electric fleet.

BMW, another European car maker, expects at least 50% of its global sales to be fully electric vehicles by 2030. Moreover, the company is expecting to deliver more than 100,000 fully electric vehicles to consumers this year alone.

As a result of the underlying trend in the electric vehicles market, the minerals used to build them are poised to be in strong demand in the future. Copper, lithium, nickel, manganese and cobalt make up more than half of all the minerals needed to build an electric car.

The good news is that wind, solar and nuclear power are responsible for most of the copper production. The bad news is that more efficient ways must be found to extract the other minerals.

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