Electric vehicles and Copper demand

How much copper do electric vehicles need?

When we think about the components that make up a car, our minds usually jump to their metal bodies, the engines, tires, and all the upholstery inside. A little known fact that actually makes up a significant portion of the car? The average American car contains about 55 pounds of copper wiring. An electric car has three times as much copper in it, thanks to their rotors.

Why’s that particular figure so important to us? Well, today, less than one per cent of the world’s vehicles are electric. However, that number is meant to skyrocket – by 2040, it’s been predicted that more than half of all new cars will by electric. And more electric vehicles (or EVs, for short), mean more copper needs to be used.

What this means for electric cars in the future

As Colin Hamilton, managing director of commodities research at BMO Capital Markets, mentioned in an interview, “you can’t have an electric vehicle revolution without infrastructure in place”. What that basically means is that we can’t get ahead of ourselves – if we don’t have the means to support having a majority-electric car nation, like charging docks, or enough copper, there’s no point in projecting all these numbers for the future.

According to his data, however, he estimates that the amount of copper being used in EVs has been overstated. He goes on to say that EVs “are a great long-term story, but demand is only expected to be around one and a half percent of world refined copper consumption this year, and even five years out is unlikely to be anything more than three percent,” as told investors and miners attending this week’s World’s Copper Conference in Santiago, Chile.

The BMO analyst also talked about the fact that demand for EVs will grow significantly once we have the facilities to support them, like more charging stations available to the public, as well as tackling necessary upgrades to electric grids to support a sharp increase in energy consumption.

The number of charging stations and outlets in the U.S. reached 57,000 in 2018.

In fact, if we start doing all these things, what we’d be looking at is a global infrastructure transformation and not the EVs themselves. And that’s what will firstly affect global copper demand.

A key metal of the future

Data released by the International Copper Association shows that we’ll need more than 40 million charging ports over the course of the next 10 years, which means using an extra 100,000 tonnes of copper a year by 2027. It’s also been predicted that at least a whopping three million of those stations will be built in China by 20301.

What does this mean for the world? Over the next decade, experts are predicting that global copper demand up to five million tonnes. Once EVs start getting more popular and accessible, it’s 11,000,000 tonnes of new copper for EV’s alone!

Electric cars will hopefully mean a greater adoption of clean technologies, that in turn would boost copper demand from 10 to 15 per cent by 2030. Because copper and lithium are so interlinked in electric cars, this means lithium will jump up by 80% as well. This could be concerning, however; according to the BMO Capital Markets, we could be looking at a supply deficit of over 900,000 tonnes by 2022. This is because of the deterioration in ore grades in all the major copper and lithium producing countries, from lack of new discoveries and no investment in exploration for these metals. This only highlights the critical need for exploration companies, because without them we will face a serious lack of supply in the future.







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