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RANKED: Top 20 automakers by EV battery metal spending
Battery metals play a crucial role in the electric vehicle (EV) market, especially as global demand continues to surge. In September 2023, the deployment of essential battery metals reached unprecedented heights, with a remarkable 171 kilotonnes of key materials such as graphite, lithium, nickel, cobalt, and manganese incorporated into new EVs. This figure represents a 26% increase compared to the same month in the previous year. It’s important to note that this total reflects terminal installed tonnes; the real demand at the mine level is significantly higher.
Despite this growth, there is a shift occurring in consumer preferences, with sales of plug-in hybrid electric vehicles (PHEVs) experiencing a dramatic increase—growing nearly four times faster than battery electric vehicles (BEVs) this year. PHEVs, by design, utilize smaller batteries and therefore have a lower metal content compared to their fully electric counterparts.
### Price Dynamics of Battery Metals
Although the demand for battery metals is escalating, the financial performance within the EV battery supply chain tells a different story. Current market conditions have led to a notable downturn in lithium prices. As of October, average prices for lithium hydroxide are more than 30% lower than last December, and lithium carbonate has seen a decline of 26%. Meanwhile, cobalt sulfate has dropped significantly, now residing at some of the lowest prices recorded, while nickel sulfate has only recently begun to recover after a lengthy slump below the $20,000 per tonne mark.
Graphite prices remain in a downward trend, asserting pressure on overall profitability within the sector. In contrast, manganese sulfate is experiencing growth, with prices in China increasing by a robust 25% year-to-date.
Despite the record deployment of battery metals resulting in an overall value of $1.26 billion in September—an uptick of 38% from January’s low—this figure is 34% below the previous year’s total and significantly below the all-time high of $4.23 billion reached in December 2022.
### Spending Patterns Among Automakers
A recent analysis from Adamas Intelligence reveals the varied spending on battery materials among leading automakers in September. Notably, Tesla’s expenditure on these essential materials eclipsed that of BYD by more than double, despite the latter selling 209,000 more vehicles that month. This disparity is primarily attributed to BYD’s reliance on lithium iron phosphate (LFP) batteries, which do not require nickel, cobalt, or manganese, along with a significant portion of their sales coming from PHEVs.
Further analysis shows that Toyota spent less than $50 million on battery raw materials because 90% of its electric vehicle shipments were conventional hybrids, which utilize smaller batteries averaging less than 4 kWh in capacity. This underlines the continuing relevance of hybrid vehicles in the demand for battery-related metals, particularly those using nickel-metal hydride cells.
Interestingly, Li Auto, ranked fifth in expenditure with $37 million, illustrates an exception to the norm. This Chinese manufacturer specializes in extended-range electric vehicles (EREVs), where an internal combustion engine provides energy mainly for battery charging. Despite LFP batteries being used in some models, Li Auto incorporates high-nickel NCM batteries in its flagship vehicles, driving higher demand for nickel.
### Conclusion
The trajectory of EV battery metal deployment indicates strong growth potential in the sector, reflecting consumer shifts towards hybrid models that may influence future market dynamics. While the initial outlook appears promising, the complexities of commodity pricing present challenges that could impact the industry’s health. Stakeholders should remain vigilant as trends evolve and adapt their strategies to navigate this rapidly changing landscape. With the movement toward greener technology and sustainability, the investment in battery metals will undoubtedly continue to shape the future of transportation and energy solutions worldwide.
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