The speed in the rise of UK electric vehicle (EV) sales could slow within the next few years due to a worldwide deficit in the lithium needed for car batteries, according to experts.
Since June, car giants GM and Stellantis, which owns Peugeot, Fiat and Citroen, have pledged 30 billion dollars (£21.6 billion) and 35 billion dollars (£25.2 billion) respectively in electrification investments in the next four years.
But core to this strategy is the need to secure a long-term supply of raw materials including lithium.
As a result lithium demand could triple by 2025 to one million tonnes per year and then double again to two million tonnes per year by 2030 – the year the UK plans to ban new petrol and diesel car sales.
With the typical lithium mine producing 30,000 tonnes per year of the chemical, this means the market needs approximately four new mines per year to maintain pace with demand.
But experts point out it takes five to seven years to discover, develop and put a lithium mine into production.
Chris Berry, president of Washington DC-based strategic metals advisory firm House Mountain Partners, warned: “The dramatic pace of UK electric vehicle sales growth runs the risk of slowing without a clear pathway to additional supply of lithium and associated battery metals.”
He added: “On top of sales, UK auto manufacturers risk being left behind by their Chinese, US, German, and Japanese auto peers who are in a race to ensure they have their electric supply chain in place for the rest of the decade.”
The UK is one of the fastest growing EV markets in Europe with plug-in vehicles accounting for 11% of the UK market.
According to the Society of Motor Manufacturers and Traders, battery electric vehicle sales rose 186% to 108,000 vehicles.
Mild hybrid electric vehicles grew 184% and plug-in hybrid electric vehicles increased 91%.
But there have been concerns raised in Parliament that the UK’s charging infrastructure needs significant upgrades, especially for households with no off-street parking.
Last week, the Transport Committee of MPs also said charging must be fair, with public charge points significantly more expensive than tariffs for charging at home.
In terms of lithium supply, the UK has no current hard-rock mining operation in commercial production and European supply is several years away.
The bulk of the lithium for UK electric vehicles is currently coming from Australia and South America.
Lithium producer, Ana Cabral-Gardner, co-chairman of Canada’s Sigma Lithium, said: “The race is on to meet increasing demand for high-quality lithium that is environmentally produced at a low-cost before a potential deficit for the mineral.
“The world is accelerating efforts to go green faster than the mining industry is able to sustainably produce battery quality lithium.
“UK consumers want their products to be green from extraction to production and distribution – not many mining companies can deliver this right now either.”
Scaling the small lithium-producing industry will require tens of billions of dollars in capital.
This is likely to result in a lithium market shortage by 2023 to 2024 given that lithium demand should grow at a 20% compound annual growth rate through at least the middle of this decade.
Mr Berry added: “Clearly the horse is out of the barn and the UK auto industry has realised that its future rests with the successful electrification of their vehicle fleets.
“Success with this transformation rests with ensuring a secure supply of battery raw materials including lithium.”
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