Looming lithium supply shortage threatens electric vehicle production – Advanced Propulsion Centre

The looming lithium supply shortage threatens electric vehicle production, according to a new report from the Coventry-based Advanced Propulsion Centre.

The latest forecast from the APC suggests that predicts that 25 per cent of all installed battery capacity in European-manufactured vehicles will be Lithium Iron Phosphate or derivatives thereof as manufacturers reduce their reliance on nickel and cobalt in battery production.

But the most recent APC projections show that the global lithium deficit in 2030 could see the expected manufacture of 40 million BEVs reduced to just 25 million in that constrained scenario.

Julian Hetherington, automotive transformation director at the APC, said: "“The lithium industry is still relatively small compared to other technology metals, and we understand the challenges this industry faces in scaling up to meet the demands of BEV production over the coming years.”

“The UK government and industry is rightly investing in building Gigafactories to not only secure vehicle assembly, but also energise a UK supply base for high value components like cathodes and anodes.

"However, we also recognise the importance of securing stable material supply chains. That’s why the APC has supported UK feasibility study projects exploring lithium extraction and refining via our Automotive Transformation Fund.”

The APC’s insight report, launched this week, aims to define the lithium supply challenge facing the automotive industry. The next Quarterly Demand Forecast will explore the impact of increasing lithium supply as well as reducing demand.

Luke Bates, Automotive Analyst at the APC, said: "“In the face of a future lithium squeeze, the industry needs further investments to increase the supply of lithium chemicals and enact measures that reduce our demand for it.”

“We can’t rely solely on supply side measures to increase the primary supply of battery grade lithium or think recycling is a silver bullet.

"Using smaller or modular batteries, introducing sodium-ion in entry level vehicles and adopting fuel cells for larger, heavier vehicles are all potential pathways we could explore.”

The APC is the organisation tasked by the UK government and automotive industry to accelerate the transition to low-carbon transport solutions.

They use their unique insight, gained from working closely with the global automotive industry to provide insight and forecasting to support government with strategic policy decisions and also to provide clarity to the industry about the projected demand, product and technology roadmaps.

The report can be read in full at https://www.apcuk.co.uk/app/uploads/2022/06/Q1-2022-automotive-industry-demand-forecast-report.pdf