As the International Energy Agency concludes that a surge in investment may bridge the critical minerals supply and demand gap by 2030, other researchers are suggesting another approach to closing in on climate goals: smaller electric vehicles.
“Making smaller electric cars is the single biggest thing we can do to curb our consumption of battery raw materials,” said Julia Poliscanova, senior director for vehicles and e-mobility supply chains at Brussels-based Transport & Environment (T&E). “If we are serious about not repeating the mistakes of insatiable oil dependency, then resource efficiency has to play a big role.”
She added: “In a supply constrained world, smaller electric cars are not just an environmental must, but a sound economic and industrial policy.”
Demand for critical minerals has surged over the past five years, explains Reuters, including a tripling in consumption of lithium and a 70% jump for cobalt, with the total critical minerals market now worth US$320 billion, according to the IEA. As essential components in many of today’s rapidly growing clean energy technologies—from wind turbines and electricity networks to EVs—a steady supply of critical minerals is essential as countries race to decarbonize their economies.
In Europe alone, decarbonizing the vehicle fleet by 2050 will require 200 times the battery raw minerals the continent consumed in 2022.
But T&E found that measures to produce lighter vehicles with smaller batteries can go a long way in cutting demand for the critical metals subset of critical minerals. Since EVs are across the board heavier than their gas or diesel counterparts—with the average petrol car weighing around 1,600 kilograms compared to 2,000 for electric cars—T&E projects demand reductions of 19 to 23% for smaller EVs. Such cars are also perfect for batteries with less resource-intensive chemistries that can reduce metal demand by up to 20%.
Cutting down journeys by private cars can deliver another 7-9% reduction in demand, T&E says. In total, cutting battery sizes, improving chemistries, and reducing private car journeys can cut expected consumption by 36 to 49% by 2050.
Scaling back the demand for critical metals will not only help make decarbonization more achievable, but could also lessen environmental destruction and human rights abuses of mining projects, which have led to fears of an unjust transition.
“There has been mixed progress towards improving sustainable and responsible practices,” the IEA writes in its 2023 critical minerals market review. The Paris-based agency adds that mining companies may be making headway on community investment, worker safety, and gender balance, but “environmental indicators are not improving at the same rate.” And “greenhouse gas emissions remain high, with roughly the same amount being emitted per tonne of mineral output every year.”
According to the review, a recent surge in investment has moved the market closer to meeting the projected output needed for the energy transition—if all goes to plan. Overall, the market size for critical minerals has doubled over the past five years.
“We are happy that for a change we can give some good news,” said IEA Executive Director Fatih Birol. “This is testimony that the markets are buying into the fact that the clean energy transition is moving very fast.”
But there is still a risk that cost overruns and project delays could slow down the pace. And the improved outlook for mining does not necessarily translate throughout the critical mineral supply chain.
“Diversity of supply also remains a concern, with many new project announcements coming from already dominant countries,” writes the IEA.
Action from policy-makers is also needed to shape responsible consumption trends for end products, the agency says. “Despite the availability of cleaner production pathways, there are few signs that end users are prioritizing them in their sourcing and investment decisions, although some downstream companies have started to give preference to minerals with a lower climate impact.”