The world is addicted to electrical goods. Every month, around 100 million smartphones are sold. Now, another indispensable tool of modern life – the car – is going electric. But whereas a smartphone battery contains just a few grams of rare earth materials such as lithium, EV batteries use upwards of 10kg.

Which is leading many to wonder whether the world will simply run out of batteries to power the transition to electric cars.

After all, the minerals that go into EV batteries are hardly commonplace. Projected demand for batteries runs ahead of current estimated lithium mining capacity. Then there’s all the nickel, cobalt, graphite, manganese, zinc and other rare earth materials – not to mention more than 50kg of copper in the average EV battery. In comparison, making and fuelling a petrol engine is child’s play.

So is the world on track to run out of batteries before the electric car revolution has even got underway? Well, as you can imagine, the answer is… complicated.

A clear-cut business case

Certainly, the business case for EVs is pretty clear-cut. From 2030, only new electrified cars can be legally sold in the UK. Then, from 2035  it’s pure electric. The EU has the same 2035 deadline, and even North America is rapidly electrifying as it attempts to catch up with EV leader China. Experts estimate that 40 per cent of all new cars sold globally in 2031 will be battery-electric.

That’s a lot of cars. And a lot of batteries. Research specialist Bernstein predicts 2,700 GWh of required battery capacity by 2030, a six-fold increase on today. And that’s seemingly conservative: fellow researcher Rystad puts it at 4,000 GWh.

Needless to say, the battery value chain is undergoing frenzied activity. Mining companies are thriving, every country is clamouring to secure one of the many new gigafactories required to build these batteries, and prices for battery metals are spiking. Lithium is particularly problematic, with prices surging ninefold in less than two years.

Such is the world of supply and demand. The projected demand for batteries is running way ahead of current mining and battery production capacity, most of which is concentrated in China. Analysts used to say 2024 would be the year when buying and running an EV would be as cheap as a fossil-fuelled car. That target is now being pushed back.

There is one aspect the experts largely agree on, though: the world is ultimately on-track to meet the frenzied demand for all these batteries.

Sure, there are dissenting voices: a Bank of America Global Research report said global EV battery supply is in danger of running out as soon as 2025. But the broader consensus is that such reports are outliers. Provided, that is, the roadmap for ramping up battery production, upon which billions of investment dollars ride, bears fruit.

Which is easier said than done…

Minecraft

The International Energy Agency predicts EV demand will require 50 new lithium mines, 60 new nickel mines and 17 additional cobalt developments by 2030. Traditionally, these take a yawning 15 years to come on stream. But, to speed things up, car manufacturers are now bypassing the supply chain and dealing directly with mining companies, to help them raise finance and fast-track processing facilities.

It’s a diversion from the traditional route of relying heavily on suppliers. Indeed, it goes back to the early days of automotive production, where magnates like Henry Ford vertically integrated their raw material supply chains, from coal mines in America to rubber plantations in the Amazon.

Tesla, needless to say, is being particularly proactive in this area. It has even held talks with commodities firm Glencore about taking a direct stake in the Swiss group. Elon Musk would prefer to go one better, though, and develop his own in-house mining capabilities – and will actually start building a lithium refinery in Texas this year.

This is driven by lithium being the key pinch point. Experts generally agree there is more than enough lithium in the world to power the future switch to EVs. The challenge is creating enough mining capacity to bring it all to the surface.

Because analysts seemingly can’t agree on whether there will be a future surplus or deficit of mined lithium, and when any shortages will occur, the jury is out on when any pinch-points will occur. If, that is, market forces don’t come to the rescue and shake it all out.

What is agreed is that things will get more challenging as we approach 2035. Today’s technology, which is hungry for rare earth materials, simply won’t cut it. But the automotive industry already has an answer.

Solid state status

Solid state batteries are the panacea. Experts call them ‘game-changing’. Instead of today’s liquid-based lithium-ion batteries, the liquid electrolyte is replaced with a solid one, with lithium replacing graphite at the anode.

They don’t necessarily use much less lithium. But they have a far higher energy density – some say almost double the capacity – which means higher ranges for the same amount of lithium. Or indeed fewer rare earth materials for the same range as today’s batteries.

They are also safer and smaller, and the target is for them to last even longer than current batteries – maybe even giving them a second life in cars, so multiple models can be powered by the same amount of mined materials.

Like most things in the automotive industry, they’re still a decade away, say many. But don’t bet against solutions being fast-tracked as the need to conserve today’s supplies becomes ever-more important.

Indeed, Nissan looks set to steal another march here. Just as it popularised the mainstream electric car with the original Leaf, now it aims to make solid state batteries mainstream – with a production facility due to start pilot production by 2025.

The target is for full production from 2028, delivering batteries that are 50 per cent cheaper, with twice the energy density, and three times the charging speed. They will make EVs as easy to live with as today’s diesel cars. Factor in silent running, and super acceleration, and they will finally become a fleet car dream.

Battery supply will cope – but at what cost?

So, will the world run out of batteries to power EVs? Billions of dollars of investment says it won’t. The auto industry always finds a way, and while some of the challenges seem insurmountable today, they will be overcome. Tests in Germany, for example, are looking at in-road wireless charging which if adopted would reduce the need for larger batteries because range could be topped up on the fly.

But the question is, at what cost? Will the domination of new EVs lead to higher prices becoming the new norm? Or will the arrival of solid state batteries finally deliver the dream of EVs for the same price as fossil-fuelled cars (ideally with the same range and ease of filling up, too)?

One thing is for sure: the future of EVs is going to be interesting – and will rewire the automotive industry as we know it. Get ready for an electrifying few years…