Rare Earths and Metals – Is the Production of Electric Vehicles in Europe at Risk of Failing?
According to a press release from the Frankfurt Trade Fair Company, the battle for the most important raw materials is already in full swing. One of the most important raw materials for the transition in propulsion systems is lithium. The excellent electrochemical properties of the alkali metal make rechargeable batteries with high energy density possible in the first place.
"A typical electric car contains about eight to nine kilograms of lithium in different compositions of cathode material," explains Dr. Matthias Buchert, Head of Resources and Mobility at the independent research institute Öko-Institut e. V. and advisor to the European Union's (EU) Directorates-General. "The lithium-ion battery is the heart of the modern electric drive and this will not change for the foreseeable future."
70 kilograms of copper in the vehicle
However, lithium is not the only important raw material for electromobility. Copper, for example, is also in demand for electric cars due to its excellent electrical conductivity. With around 70 kilograms per car, about three times the amount is needed for an electric car compared to a combustion engine car. Cobalt, nickel, manganese, graphite, and other rare earths are also used in electric drive technologies.
Lithium is in demand, cobalt depleted in eleven years
The largest known lithium reserve, at around nine million tons, is in Chile, followed by reserves in Australia, Argentina, and China. If the supply chain functions well, there is enough lithium worldwide to enable a global transition of propulsion systems. But another raw material is causing even more concern - cobalt. At the current global consumption rate, cobalt reserves will last for only about eleven more years.
“About half of the known reserves are located in Congo, where it is mined under partially problematic human rights conditions," says Dr. Karl Lichtblau, Managing Director of the German Economic Institute (IW Consult), which regularly conducts studies on this topic for companies and political committees.
The heavy metal has long been important in many industrial applications, such as hardening metals and manufacturing magnets. Cars with internal combustion engines typically contain only a few grams of cobalt. In electric cars, on the other hand, the amounts are in the double-digit kilogram range, as cobalt is an important component of lithium-ion batteries. It ensures particularly high energy density, long ranges, fast charging times, and smaller batteries.
Researchers are working on resource-optimized batteries
With the increasing importance of electromobility, the demand for cobalt is also rising, says Lichtblau. Thus, the known reserves of seven million tons could already be exhausted in less than eleven years.
“The specific cobalt content of the cathode material dominating the European automotive market in lithium-ion batteries (lithium-ion manganese cobalt oxide) has already been significantly reduced. The energy density of these batteries is somewhat lower. However, we assume that in the small car segment, lower requirements are placed on the mileage of electric cars," explains Öko-Institut expert Buchert. He adds that research is being conducted into further reducing the cobalt content and even into energy storage systems that do not use cobalt, such as a new generation of lithium iron phosphate batteries.
Recycling could cover half of the raw material demand
Buchert hopes that the EU will soon introduce a new battery directive that will apply in all 27 member states. Many European countries have already made industrial policy decisions that take into account the importance of production, research, and raw material recycling for batteries. Battery recycling plants are set to experience a boom. For instance, the Belgian metallurgy company Umicore plans to build the world's largest battery recycling plant in Europe by 2026 at an estimated cost of 500 million euros. This corresponds to a capacity of 150,000 tons per year. Currently, large plants only manage about 12,000 tons.
Effect with delay
The recycling effect will, however, be somewhat delayed. In the first few years, it will only be a few percent because batteries remain in vehicles for a long time and then may have a second life in stationary battery storage systems. But after 2035, the coverage share could exceed one-tenth, and eventually, recycling will provide half of the required raw materials for e-mobility – solely from domestic production, i.e., from the existing electric cars on our roads.
“Recycling must be considered from the beginning; it starts with the design and manufacturing of batteries and drive components to ensure that raw materials can be easily recovered,” emphasizes Lichtblau. “Currently, this is not yet profitable for companies.”
Raw material availability is also geopolitics
However, recycling and research alone will not suffice, says Lichtblau. Smart geopolitics and diplomacy are key to achieving the energy transition within the given timeframe. He refers to what we recently experienced with nickel, a silvery metal needed for battery cathodes (negative electrode) like cobalt. After Russia's illegal attack on Ukraine, the price of nickel skyrocketed in a short period, and the London Metal Exchange even had to temporarily halt trading. This is because Russia is one of the largest nickel exporters in the world. The concern over supply shortages due to Western sanctions and Russian counter-sanctions was significant.
“We will have an even bigger problem if there is a geopolitical conflict between the West and China. Should this occur, I have my doubts whether a drive transformation in Europe can succeed within the planned timeframe," warns Lichtblau.
China: Number One Supplier of Raw Materials
After all, according to the German Raw Materials Agency (DERA), China is the most important supplier of raw materials to the EU for metals and ores, even ahead of Russia. Rare earths such as neodymium and dysprosium are particularly important for electromobility. China is the world leader in both reserves and processing in this area. A figure from the European Raw Materials Alliance (ERMA) makes the dependency on China particularly clear: Although the EU is a world-leading manufacturer of electric motors, it imports 90 percent of the permanent magnets based on rare earths required for these motors from China. If the Chinese government were to strategically use its dominant position in raw materials for political goals, it would lead to shortages in Europe.
Raw Materials from Space?
Ultimately, Europe's ability to influence geopolitical developments is limited. And even the most intensive research efforts cannot guarantee that enough raw materials will be available. Plans to mine rare raw materials in space—for example, on asteroids—are now being dismissed by raw material experts.
"A few years ago, we had the same discussion about mining rare earths from the depths of the ocean," recalls Buchert. "Nothing came of it because the effort and costs were disproportionate to the benefits. The seabed is still a more likely candidate than space. Even if it were technically possible someday, it would make no economic sense. It would be much better to use and recycle the raw materials we have on our planet efficiently."
What Does This Mean?
Where do all these raw materials come from and do we have enough of them to achieve the propulsion shift? Especially for Europe, the answer can only be an effective recycling program.
Translated automatically from German.Elektromobilität , Newsletter Elektromobilität , IAA Mobility , SUVs und Geländewagen , Hybrid , Antriebsarten, Kraftstoffe und Emissionen , Oberklasse- und Sportwagen , Carsharing , Autonomes Fahren (Straßenverkehr) , Ladeinfrastruktur , Verkehrspolitik , Formel E , Brennstoffzellen , Fahrzeug-Vernetzung und -Kommunikation , Fahrzeuge & Fuhrpark , Automotive-Messen & Veranstaltungen , Pkw, Kompakt- und Mittelklasse , Minis und Kleinwagen , E-Auto-Datenbank, E-Mobilität-/Automotive-Newsletter, E-Auto-Tests