US BEV growth 'will not be hindered' by critical minerals

The United States is likely to have adequate supply of critical raw minerals to support its planned shifted to BEVs, according to a study by the International Council on Clean Transportation (ICCT).

Under proposed EPA rules, US automakers are forecast to be required to have 60pc of the vehicles they manufacture be BEVs by 2030 and 67pc by 2032.

The targets have led to concerns that these manufacturers will face a shortage of critical raw materials — particularly lithium, cobalt and nickel — to meet their requirements.

But analysis carried out by the ICCT indicates that new lithium supply may far exceed lithium demand from new BEVs through 2032, as a swathe of new lithium mining and refining projects come online within the United States and countries with which it has trade agreements.

Projects coming on stream before 2032 will bring a lithium extraction capacity of 2,170 kt /yr and a refining capacity of 2,040 kt /yr, by that date. This compares to a forecast US demand of just over 500 kt /yr for heavy and light-duty vehicles.

Meanwhile a production ramp up in Indonesia will contribute to a price decrease in the nickel and cobalt market over the next four years. The nickel market is forecast to be in surplus after 2025 and various price forecasts also project declining prices for cobalt after 2023.

Furthermore, the role of nickel in BEV batteries remains uncertain, the report notes.

“In 2022, nickel- and cobalt-free LFP batteries constituted nearly 30pc of the global market share. A continued shift towards LFP batteries would further reduce nickel demand,” says the ICCT report.

Modelling battery costs

The report goes on to forecast BEV prices in the US based on critical mineral prices under various scenarios. Without incentives, under all but one scenario BEVs reach cost parity with conventional ICE by 2028, with average vehicle prices dropping to $30,000 by that date.

With incentives, BEVs reach cost parity with conventional ICE vehicles three years earlier.

“When both the battery production and clean vehicle tax credits are considered, a 300-mile range SUV is expected to reach price parity with its conventional counterpart around 2025,” says the report.

The BEV cost falls are in large part due to technological advancements in BEV energy efficiency and battery-specific energy gains.

Under a worst-case scenario – with extremely high critical raw material prices in the second half of this decade – BEV cost parity with ICE vehicles is not reached until 2031-2032.

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