Automakers to trading houses from North America to Europe are becoming more concerned about future supply shortages of key materials needed for electric vehicle batteries as spending on new production soars, according to the developer of a $1.5 billion project in Australia.
More than a dozen parties have now expressed interest in taking up as much as a 50 percent stake in Clean TeQ Holdings Ltd’s Sunrise nickel-cobalt-scandium project, Chief Executive Officer Sam Riggall said. They include companies in regions that until recently had shown less impetus to tie up raw material supplies.
“It’s dawning on North America and Europe that there’s a raw materials issue that needs to be addressed here,” Riggall said by phone. “For the previous two years, I’ve been wearing out a lot of shoe leather and banging on a lot of doors trying to get interest in Europe and North America with very little success. In the last six months things have changed quite dramatically.”
Volkswagen AG in May picked Sweden’s Northvolt AB as a partner to start production of battery cells for electric cars, while the German and French governments have pledged funding and political support for efforts to spur a European battery manufacturing industry.
In the US, the number of battery electric models available to consumers is forecast to double by the end of 2021, according to BloombergNEF.
Melbourne-based Clean TeQ, which said it had appointed Macquarie Group Ltd to run a process to identify a partner, is seeking final offers for a stake in the Sunrise project by the end of September, and will aim to complete any sale by the end of the year, according to Riggall.
China’s grip on lithium-ion battery cell manufacturing is forecast to loosen through 2025, as new capacity is added close
to demand centers in the US and Europe, BNEF said in a report.
The scale of planned investments in electric lineups means both automakers and related industries in Europe and North America are focussing on how to secure future supplies of battery-grade nickel — and also on ensuring there’s sufficient cobalt after the market tightens from about 2021 to 2022, Riggall said.
“Their minds are being forced to turn to raw materials,” he said.