Battery production to tenfold by 2030

In the transportation industry, regulatory support and automakers’ climate objectives have led to increased demand for electric vehicles (EVs) and their batteries. Global demand for EV batteries more than quadrupled from 2020 to 2021, reaching around 0.3 TWh/year. ING predicts that this will reach 0.6 TWh/year in 2023.

However, higher EV battery output is being hindered by rising metal prices, particularly those of lithium. Supply chain concerns, such as the Russian invasion of Ukraine and its effect on nickel supply, and systemic underinvestment in metals prior to the pandemic are contributing to metal price increases. ING anticipates that metal prices will remain high in 2023, despite a slight decline from peak levels.

Battery manufacturers and automakers may migrate to less-metal-intensive batteries like lithium iron phosphate cathode chemistry (LFP) batteries, which don’t require nickel or cobalt. Global production of LFP EV batteries has more than quadrupled since 2020, mostly due to Chinese technical improvement, and this trend is expected to continue in 2023. Some businesses are also considering creating sodium-ion (Na-ion) batteries, although it will take some time before they are widely produced for commercial use. Businesses outside of China are attempting to create alternative supply chains to reduce their dependency on the nation, but significant changes won’t occur until 2023.

Source: Energy outlook 2023 | ING

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