Potential nickel shortage could impact EV production

Supplies of nickel are expected to dwindle in the coming years – giving rise to potential problems in manufacturing increasing numbers of electric vehicles.

Rystad Energy has said high demand for the material, thanks to the production of EV battery cells, could result in a shortage of nickel by 2026, reports E&E News.

The firm also projected annual nickel demand could rise from its current level of 2.5 million tonnes per year to 3.4 million tonnes by 2024, a 136 per cent increase over a three-year period.

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While nearly all current EVs in production are powered by lithium-ion battery packs, nickel is actually the more predominant element used in the cells – helping to deliver higher energy density and storage capacity at a lower cost.

The potential shortage of materials has seen automotive manufacturers such as Volkswagen Group, Daimler and Stellantis searching for adequate supplies of lithium, nickel, manganese and cobalt, according to Automotive News.

All three companies have recently invested heavily in battery production facilities, popping up all over Europe in addition to similar efforts from Ford and Chevrolet in the United States. However, a lack of raw material supply could seriously disrupt the automotive industry in a similar way to the current semiconductor shortage.

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Increasing demand for EVs can be attributed, in part, towards legislation being introduced overseas to ban the production of internal combustion engine-powered vehicles – with the UK targeting an outlaw date of 2030 while the European Union has set its sights on 2035.

In the United States, home to EV giant Tesla, the recently-appointed Biden Administration is pushing for fully-electric vehicles to make up at least 40 per cent of production volume by 2030 – triggering the country's 'Big Three' manufacturers to rethink their line-ups.

A lack of unified policy in Australia has seen multiple manufacturers call out the Federal Government's position on EVs and hesitate to bring their respective full ranges of products to the local market, with no date yet set on a move away from fossil-fuel powered vehicles.