Global nickel demand could outstrip supply within the next few years, potentially limiting EV battery supplies, according to a new report from the Norwegian consultancy Rystad Energy.
First spotted by E&E News, the report predicts that by 2024 annual global demand for nickel will rise from the current 2.5 million metric tons (2.7 million tons) to 3.4 million metric tons (3.7 million tons), exceeding available supplies. The gap will continue to widen after that, according to the report.
This could be particularly difficult for the battery industry because, unlike other battery raw materials, nickel is also used by other large industries, the report noted. In 2020, the stainless steel industry accounted for about 70% of global demand, while the battery industry accounted for less than 10% of demand.
Global nickel supply and demand forecast (from Rystad Energy report)
With automakers ramping up EV production, demand for nickel to be used in batteries is expected to accelerate much more quickly than other industries, which are also seeing some growth in nickel demand, according to the report. The surge in demand for home goods comes to mind, for instance.
The result could be supply headaches and higher battery costs for automakers. That could push automakers and mining companies to look at "previously unattractive" deposits of nickel, the mining of which could present greater environmental or social issues, the report cautioned.
A nickel shortage could also encourage automakers to look at alternative battery chemistries, Rystad added, suggesting that lithium iron phosphate (LFP) or sodium-ion chemistries might help.
BYD Han EV
Tesla's 2020 Battery Day presentation was focused somewhat on breaking out the chemistries that needed nickel versus the ones that didn't. That included potentially using more LFP cells, beyond their current use in the Model 3 for China. In addition, BYD has said that it is going nickel-free with its batteries.
This isn't the first time analysts have warned of a nickel shortage impacting EV battery production. In 2019, a potential shortage of nickel, and a price spike, might have started to affect battery supply.
That same year, Bloomberg New Energy Finance projected that demand for nickel will multiply 16 times by 2030, with half of that expected to go into batteries.