EDITOR’S COMMENTS: Electric vehicle battery market on a tear

By Ellsworth Dickson

While most of us are aware of major carmakers such as Nissan, Chevrolet, Tesla, Honda, BMW and others building electric vehicles (EVs), there has been a virtual explosion of relatively unknown junior EV manufacturers – all needing copper, lithium, manganese, nickel, graphite and cobalt for their batteries.

We have covered Xos Trucks in the past. Based in North Hollywood, Xos builds electric semi tractors and delivery vehicles. This morning I received a press release from another Los Angeles area electric vehicle maker – Greenpower Motor Company Inc. [GPV-TSXV].

Located east of LA in Rancho Cucamonga, Greenpower builds high-floor and low-floor vehicles, including transit buses, school buses, shuttles, a cargo van and a double decker busses. The company just received an order for100 EV Stars busses from Green Commuter.

Green Commuter is the America’s largest all-electric van pool fleet operator and has previously taken delivery of 48 EV Stars with their initial order for 100 units, with the balance of that order expected to be delivered in calendar 2020.

However, these California EV builders are just two of a growing number of EV start-ups that now include Vancouver-based Electra Meccanica, Piëch, NIO, Faraday Future, Byton, Canoo, Rivian, e-Niro, Lucid, Faraday Future, e20 plus, Kona Electric, Lightning GT and others too numerous to list.

Looking at the big picture, what does this mean for battery demand and their necessary minerals?

According to a recent research report by Global Industry Analysts, Inc., amid the COVID-19 crisis, the global market for electric vehicle battery is estimated at US$30.7 billion for the year 2020, and is projected to reach a revised size of US$87.2 billion by 2027, growing at a compound annual growth rate (CAGR) of 16.1% over the analysis period 2020-2027.

The report stated that the electric vehicle battery market in the U.S. is estimated at US$8.3 billion for the year 2020. China, the world`s second largest economy, is forecast to reach a projected market size of US$19.8 billion by the year 2027, trailing a CAGR of 20.5% over the analysis period 2020 to 2027.

Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 11.5% and 14.2%, respectively, over the 2020-2027 period. Within Europe, Germany is forecast to grow at approximately 12.7% CAGR.

The report went on to state that in the global lithium-ion battery segment, USA, Canada, Japan, China and Europe will drive the 16.7% CAGR estimated for this segment. These regional markets accounting for a combined market size of US$10.5 billion in the year 2020 will reach a projected size of US$30.8 billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets. Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific is forecast to reach US$13.5 billion by the year 2027, while Latin America will expand at a 19.5% CAGR through the analysis period.

As to be expected, with the huge influx of new EV manufacturers not all will be successful; however, there is now no stopping the electric vehicle revolution. This is a brand new industry for the world and will no doubt significantly benefit battery mineral explorers.

As an example, Tesla’s Elon Musk recently said, “I’d just like to re-emphasize, any mining companies out there, please mine more nickel, Wherever you are in the world, please mine more nickel and don’t wait for nickel to go back to some high point that you experienced some five years ago or whatever, go for efficiency.”

That comment was enough to send nickel prices soaring on the London Metal Exchange, the price rising 4.5% to close at US$13,689 per tonne on July 24, while turnover reached its highest in four months. On August 7, nickel was trading at US$14,380 per tonne, or US$6.46 per pound. Nickel is a key ingredient for batteries used in Tesla electric vehicles.