Electric cars have always been a dream for environmentalists. There may be something of a dark side of that dream.
Thanks to recent increases in affordability and efficacy, electric cars are ready to shift from conceptual rarities to fixtures of everyday life. While they’re lauded for the environmental benefit they provide by not relying on gasoline or diesel, their overall environmental impact is not as immaculate as many think it is.
As more electric cars are manufactured, demand for three key metals will increase, and with that upswing in demand will come a magnification of the concerns about how those metals are mined, traded and used.
Electric cars: Clearing the air
Estimates vary, but the automotive sector is believed to contribute between 15 and 25 percent of polluting emissions like nitrogen oxide, particulate matter and carbon dioxide. Reducing or even eliminating those emissions will be beneficial to public health and will reduce the potential effect on climate change.
As such, an increasing amount of original equipment manufacturers (OEMs) have announced commitments towards hybrid and pure electric powertrains. Their aims have been supported by governments across the globe, which have stated their intent to ban internal combustion engine vehicles in the near future.
Clean, but not green?
Electric cars will be beneficial to us all, but there could be human and environmental challenges along the way.
The switch from internal combustion engine vehicles to electric vehicles brings about a change in raw materials used. Three worth paying special attention to are lithium, cobalt and copper.
People are calling lithium the new gasoline. There’s plenty of this element to go around, especially in South America (Chile, Bolivia and Brazil are among the top lithium exporters). The challenge is going to be whether we can keep extracting it at a rate that keeps up with demand. Lithium makes up 12 percent of battery cost. Around 14 percent of lithium demand comes directly from the electric car sector today. In 2025, that is estimated to be 38 percent. After that the demand curve could even turn parabolic.
While the lithium mining sector isn’t especially notorious today, South American countries have been criticized for the way gold, silver and tin operations there have treated workers and the environment. If demand for lithium blasts upward, it raises the possibility human rights and environmental protections might fall by the wayside as we try to keep up.
With its abundance of cobalt deposits, the Democratic Republic of Congo (DRC) could benefit from electric cars the same way Saudi Arabia did from oil.
Doing business in the DRC, however, is a very difficult proposition. Mining is pretty much unregulated, and the country continues to struggle with corruption and violence.
Despite the presence of big mining companies, approximately 20 to 45 percent of cobalt in the DRC comes from “artisanal” suppliers. Their working conditions are appalling. They fall well short of industry norm on health and safety procedures and proper mining equipment is lacking. In many cases it is outright dangerous.
On top of that, the DRC is one of five countries in the Congo Basin – “one of the most important wilderness areas left on Earth,” in the words of the World Wildlife Fund. The rainforests, animals and water resources there that could be damaged by nonexistent environmental safeguards are not easily replaced.
Some companies are investing heavily in the DRC, as the rewards could be huge. However, securing cobalt from the DRC remains a major political, environmental and socio/legal risk.
One other base metal is also going to see a significant rise in demand: copper.
The electric car revolution will result in new demand for copper in three primary ways: vehicles, charging stations, and electricity grids.
Up to 90 percent of copper demand increase in the electric vehicle space will come from vehicles themselves. There is likely to be an average net 70 kg increase per vehicle, from 20 kg in an internal combustion vehicle to 90 kg in an electric vehicle.
Charging stations will be needed to keep up with demand. In total, we expect the charging infrastructure to add around 5 to 10 percent of total copper demand increase.
Finally, the incremental increase of copper demand in the electricity grid looks to be negligible. On street level with high utilization of electric cars, some extra transformers will be required. But in general, capacity is abundant and the smart grid will make sure a smoothing of charging times.
As is the case with lithium, copper mining doesn’t raise as many immediate concerns as does cobalt. That being said, copper mining operations worldwide have caused ecological problems with their mining waste. Nearby water supplies, in particular, have suffered because of poor storage and transfer.
None of this should be interpreted as saying electric cars are intrinsically harmful to the environment. That isn’t necessarily the case. It is true, however, that the environmental issues they raise are complex. When industries are disrupted on this scale, it’s crucial that companies have up to the minute information and analysis so that can make the wisest decision possible. It’s also worth calling upon OEMs to strive to harvest the materials they need in a sustainable way. The present conditions under which they’re collected aren’t the way they have to be gathered – there’s room for growth and improvement.
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