EV Sales Touch New World Record But Raw Materials Could Be Spoiler

The sale of electric vehicles (EV) across the world more than doubled this year against 6.6 million last year, accounting for one in 10 new cars sold, according to the International Energy Agency‘s annual report published on May 23. However, the report mentioned that the grey areas like price and supply of critical minerals could demand greater efforts to ensure future growth.

The number of electric cars on the world’s roads by the end of 2021 was about 16.5 million, triple the amount in 2018. Half of the record breaking sales was accounted for by China alone in spite of pandemic and strained supply chains. Sales also grew strongly in Europe (increasing by 65% to 2.3 million) and the United States (more than doubling to 630 000). Chinese electric cars are typically smaller than in other markets. “Few areas of the new global energy economy are as dynamic as electric vehicles. The success of the sector in setting new sales records is extremely encouraging, but there is no room for complacency,” said IEA Executive Director Fatih Birol.

The greatest obstacles to continued strong EV sales are soaring prices for some critical minerals essential for battery manufacturing, as well as supply chain disruptions caused by Russia’s attack on Ukraine and by continued Covid-19 lockdowns in some parts of China.

Production and processing of certain key materials is currently limited to a handful of countries. China currently produces three quarters of the world’s lithium-ion batteries, the main type used in cars and small electronic devices, and has half of the global refining capacity for lithium and other key elements such as cobalt and graphite. Supplies of lithium are inadequate if electric vehicles are to replace those internal combustion engines. The IEA estimates a six-fold jump in output is needed by 2030, with the opening of 50 new mines.

While both Europe and the United States are building electric cars, and both aim to boost battery production, the IEA said the majority of the supply chain will likely remain Chinese until 2030.