How Will a Lithium-Ion Battery Shortage Impact EVs?
Lithium-ion batteries are an indispensable part of our daily lives, powering our phones, laptops, tablets, and electric vehicles (EVs). Demand for lithium in a form of lithium carbonate and lithium hydroxide – the main ingredients in these batteries – is rapidly increasing, increasing by nearly 20% in 2019. Prices more than doubled between 2016 and 2018, anticipating increased demand caused by the EV revolution.
However, the ongoing coronavirus outbreak, the looming economic downturn, and the collapse of oil prices all work against the consistent increase in demand, making the future of EV sales uncertain. These add to the stress on supply chains. The increased availability of electric vehicles has played a crucial impact in getting more people interested in them. However, researchers worry that a shortage of lithium-ion batteries might hinder the boom in electric vehicle usage. Here's a deeper look at the situation and some information about the possible associated issues that might affect fleet owners.
Rising Vehicle Popularity Worsening the Problem
If a person buys one of the most widely available EVs, there is a good chance that's a lithium-ion battery. The greater availability of electric vehicles has played a significant role in increasing public interest in them. However, academics are concerned that a lithium-ion battery scarcity may hamper the rise in electric vehicle adoption. Here's a more in-depth look at the problem and some information on the possible issues that fleet owners may face. According to data from a 2020 research, the lithium-ion batteries used in electric cars in 2019 required 19 metric kilotons of cobalt and 17 metric kilotons of lithium. In addition, projections indicate those material demands could rise to 180 and 185 kilotons, respectively, by 2030. These statistics highlighted why people interested in electric vehicles and their adoption rates are increasingly eager to find more widely available battery materials. However, it could take a while before those become feasible options.
The reason behind the production of lithium-ion batteries
The desire for bigger batteries that offer longer ranges is one of the causes behind the forecasted increased usage of materials. Fortunately, numerous projects are underway to make charging stations more accessible than voluntarily to bring them directly to drivers. Nonetheless, many potential EV customers immediately consider greater ranges to be a better option. This notion increases the desire for manufacturers to develop larger batteries, which necessitate using of additional materials.
Analysts reviews on increasing shortage of lithium-ion batteries
Consumers may also be affected by battery scarcity. Goldman Sachs analysts observed in March 2021 that the three primary materials required to manufacture a lithium-ion battery had been rising since the beginning of the year. They also pointed out that the trend would push battery costs about 18% higher, cutting into automaker's profits.
A Battery Shortage Might Make EVs More Costly
If that happens, it would also rise in the consumer costs of Electric vehicles since the battery comprises as much as 60% of the vehicle manufacturing budget, the analysts said. They did not provide many information about the magnitude of the increased expense, but they did provide a hypothetical scenario.
If nickel prices soar to their historic peak of $50,000 per tonne, that could make EVs $1,250 to $1,500 more expensive for the customers who want to buy them. The higher price tag may limit customer demand, although this is unlikely to happen very soon. People familiar with the matter believe that it could occur over the next decade.
How could a shortage of Lithium-ion batteries affect the customers?
A lithium-ion battery shortage may have an impact on both consumers and producers, but in different ways. The main point for the present is that it is a coming catastrophe rather than a current one. Furthermore, there is no one a simple solution. Thus, fleet owners who are interested in future electric vehicle investments should plan for the possibility of increasing their budgets to accommodate increased upfront costs. Similarly, it is prudent for them to keep aware of manufacturers that have taken proactive efforts to prepare for a potential battery scarcity. Planning ahead of time should lessen the possible repercussions later on.
Pushing Researchers to Develop Different Power Sources
With lithium-ion batteries becoming an indispensable part of modern life and a critical step towards the carbon depletion of the global economy, supply chain issues surrounding critical components may endanger the rise of electric vehicles. As researchers are becoming more concerned about the reality that a lithium-ion battery does not represent a limitless resource, this causes them to prioritize coming up with newer, better batteries that are not relying on materials facing shortages.
Understanding the properties of a battery during all sorts of use is the first step in selecting it as a safe and effective choice. For example, lithium-ion batteries have an exothermic reaction during charging that produces heat. Temperature control devices must take into notice to develop by engineers to prevent overheating. As a result, finding a battery substitute is only one part of the task. Other efforts are focused on ensuring that it functions as intended while posing no risks.
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