by Greg Klein | November 11, 2019
Increasing reliance on electric vehicles will challenge the ability of suppliers to meet rare earths Demand, resulting in “shortages if the market continues on a path of business as usual,” according to an independent research and advisory firm.
A new report from Adamas Intelligence forecasts a 350% increase in rare earths demand from EVs alone between 2018 and 2025. Estimates call for another 127% increase from 2025 to 2030. The REs in question consist of neodymium, praseodymium, dysprosium and terbium, key ingredients for the permanent magnets most commonly used in the vehicles.
The report foresees annual EV sales, excluding mild and micro hybrids, to multiply from 4.3 million units last year to 12.5 million in 2025 and 32 million in 2030. Over 80% of those vehicles will use permanent magnet synchronous motors, which rely on RE-bearing magnets. Given their advantages of cost and efficiency over other types of motors, Adamas expects “overwhelming” use in next-generation EV designs.
Adamas forecasts EV demand for neodymium-praseodymium oxide will rise from about 3,000 tonnes last year to 13,000 tonnes in 2025 and 28,000 tonnes in 2030, making up around 20% of total global demand in 2030. With production anticipated to increase at a slower rate, the report predicts a shortfall of 7,500 tonnes by 2030, along with a 300-tonne deficit for dysprosium oxide, “if supply is not increased beyond what is currently anticipated.”
While hybrids and fully battery-dependent vehicle sales combined rose 23% between 2010 and 2018, the study found battery-only EVs such as the Tesla Model S and Nissan Leaf increased at a compound average growth rate of 118% during that time. Battery-only vehicles showed 133% CAGR. Fully electric models will constitute about 63% of the 32 million EVs forecast for 2030, the report estimates.
Despite a general trend to cut subsidies, national, regional and municipal governments worldwide have set goals for EV use to offset climate change. But “ambitious targets alone will not drive EV penetration into the mass market,” the report maintains. “Falling costs and improved EV economics will.”
Besides rare earths, Adamas sees accelerated EV demand for lithium, nickel, cobalt, manganese, graphite and copper, as well as other metals and materials.
Read the Adamas Intelligence report: Electric Growth: EVs, Motors and Motor Materials.
