An inevitable shortage of lithium-ion battery raw materials is just around the corner. 

The prices of all the main minerals used for making Li-ion batteries – particularly Lithium and Cobalt – are expected to go up.


Lithium, which is used in the form of Lithium Carbonate and Lithium Hydroxide in Li-ion batteries, has more than doubled to what it was last November. LCE, or Lithium Carbonate Equivalent, units – the measure used by the EV industry to report Lithium prices – currently stand at an all-time high of $12,000/ton.

George Miller, a consultant analyst with London-based price reporting agency Benchmark Minerals Intelligence, tweeted on June 30th: “Lithium hydroxide continues its rally within China, rising by 6% this month with similar international gains, widening the premium to carbonate, which stabilized after big gains in H1 2021.

“Lithium demand mounting in the face of supply deficit.”

Miller also said in a statement to Reuters that unless massive investment comes to the sector, the world is on the edge of a Lithium shortage that can last this decade. 

person holding black and green electronic device
Via Unsplash


The use of Cobalt in Li-ion batteries has been cut down significantly in recent years. But due to the increase in the number of batteries being made for EVs, its demand is rising again. 

According to analysts at Roskill Commodity research, demand for Cobalt will increase to 270,000 tons by 2030, up from 141,000 tons last year. IEA has also forecasted that the demand for Cobalt by the EV industry will double by 2030.

Another reason behind Cobalt’s potential shortage is the prevalent fear of mining operations being shut down in the near future in its largest producer, the Democratic Republic of Congo, due to human rights abuse. 

What Does that Mean for Electrical Vehicles?

The problem with the mineral shortage is that it is a slow sector. So even if the investment comes today, the demand will be fulfilled in many years. However, the future of the EV industry is not as bleak as it might seem. 

Biden Has Subsidized the EV Industry 

Soon after assuming office, the Biden administration unveiled a massive $174billion program to transform US ground transportation as a giant step towards a net-zero carbon economy by 2040. To make that happen, the administration is determined to establish a local supply chain for Li-ion batteries so as to decrease reliance on China.

According to James Conway, co-chair of Securing America’s Future Energy, it is time for the US government to take measures about China’s control over the supply of minerals needed for making EV batteries. 

Conway, who is a retired Marine Corps General, said in a statement to E&E News: “If we do not build a supply chain beyond Chinese influence, the United States risks becoming reliant on decisions in Beijing.”

The Biden administration’s strong stance on shifting to clean energy indicates that the US will cope with the shortage of EV battery raw materials and that there will not be much effect on the prices.

black and silver car on parking lot
Via Unsplash

Situation in Europe 

Since the UK is going to ban internal combustion engine cars by 2030 and the rest of the EU is expected to follow suit, the demand for the materials to make Li-ion batteries is expected to increase dramatically in the next few years. 

In a report by the European Commission, titled Critical Raw Materials Resilience: Charting a Path Towards Greater Security and Sustainability, it was made clear that all the minerals needed to make Li-ion batteries are controlled predominantly by China.

However, the ambitious plans of the EU for going carbon-neutral mean that they will have to arrange for at least 18 times more Lithium and five times more Cobalt by 2030, and 60 times more Lithium and 15 times more Cobalt by 2050.

So far, there has not yet been a clear plan to arrange these materials but the European Commission report talks in detail about where these minerals are abundant and where the EU can source them from.

What Does it Mean for Electric Scooter Buyers?

According to analysts, the prices of electric scooters might go up, but it will be temporary. With governments all over the world determined to go carbon neutral and the West united to end China’s monopoly on the supply of EV raw materials, analysts believe that the Western markets will go to every extent to find a better alternative, and the supply will eventually meet the demand. During this period, there might be a brief shortage and spike in prices as it happened with gas in the 1970s, but it will be temporary. The future of mobility is undoubtedly electric.

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