Battery raw material constraints in Europe

In a recent earnings call, Elon Musk called lithium a “fundamental limiting factor” in EV adoption. Several studies are pointing out the challenge of meeting the raw materials demand in the medium-term (~ 2030) and point to the need for increased recyling.

 

A new report by Eurometaux, an association of non-ferrous metals producers and recyclers in Europe, published a study on the outlook of supply-demand of metals required for the clean energy transition in Europe.

Key Findings

The summary figure is self-explanatory, but here are key takeaways:

  • Demand for lithium will increase by > 3500% by 2050, while that of rare earths by ~600 – 2500%
  • There is no domestic mining in Europe, so that the region will have to rely on imports for raw materials and significantly increase recycling capacity. 
  • Raw materials are sourced from a few countries and there is clearly a watch-out from a geo-political perspective. 

Recently, the EU has adopted a regulatory framework for batteries which mandates material recovery and recycling of battery raw materials.

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