Metals Commentary: Electric car sales are tanking, but metal use spikes

The global auto industry will produce 88.8 million cars and light trucks this year in an almost 6% drop from a year ago, according to researcher IHS Markit, quoted by Bloomberg News.

Electric cars have been a bright spot, but due to a subsidy cut, China recently said fewer new energy vehicles — which include battery-powered and hybrid vehicles — could be sold this year than in 2018. China produces more than half of the world’s electric cars, and the drop compares to sales growth of more than 60% last year.

A report by Adamas Intelligence, which tracks the battery capacity of electric vehicles (EVs) sold around the world, adds another pain point for the industry.

The global sales-weighted average passenger EV battery capacity, a metric that has risen sharply in recent years, increased a mere 0.5% in October 2019, as battery EV sales have borne the brunt of the market’s slowdown since mid-year.

But the average nickel, cobalt and manganese use per EV battery continues to rise, despite slowing EV sales and slower average battery capacity growth, according to Adamas.

In October 2019, the average EV sold globally contained 22% more nickel, 19% more cobalt and 15% more manganese than the same month the year before — helping suppliers offset the broader slowdown in EV sales and average battery capacity growth globally.

Nickel is outperforming the market due to the shift from low- or no-nickel cathode chemistries, such as lithium iron phosphate (LFP) and nickel cobalt manganese (NCM 111), to higher-nickel varieties, such as NCM 523, 622, 811, as well as the latest generation of  nickel cobalt aluminium  used in the Tesla Model 3.

Cobalt has also outperformed the market due to the rising popularity of cobalt-bearing NCM cathode chemistries in China, which continue to glean market share from the once ubiquitous (and cobalt-devoid) LFP cathode alternative.

And in a similar fashion, manganese has continued to outperform the market due to the shift in China from manganese-devoid (or manganese-minimal) cathode chemistries, such as LFP, to higher-manganese varieties, such as NCM 111, 523, 622 and 811.

— This article first appeared on The Northern Miner’s sister publication, MINING.COM, where Frik Els is executive editor.