The EV boom is accelerating a copper crunch, Pg8

Key Highlights:

• Global EV sales have increased from 0.55 million in 2015 to an estimated 20 million in 2025.
• Associated copper consumption has surged from 27.5 thousand tonnes to over 1.28 million tons between 2015 and 2025.
• A structural copper supply deficit could emerge as early as 2026.
• China accounts for almost 60% of global EV-based copper consumption.

Detailed Insights:

• The copper demand elasticity with respect to EV sales mostly exceeded 1.0 between 2016 and 2024, indicating that copper consumption increased faster than EV adoption.
• Global copper supply is expected to exceed demand by approximately 0.3 million tonnes in 2024, but by 2026, demand is projected to reach 30 million tonnes, while supply lags at around 28 million tonnes.
• By 2025, EV-related copper demand is expected to reach approximately 210,000 tonnes in the European Union and 114,000 tonnes in the U.S.
• Declining ore grades, decade-long development timelines for new projects, and environmental opposition in major producing regions constrain copper supply growth.
• China’s dominance is driven not only by strong EV sales but also by its control of over 70% of global battery cell production and its deeply integrated supply chain.

Key Concepts Involved:

• Elasticity: A measure of how much the quantity demanded of a good responds to a change in the price of that good.
• EV (Electric Vehicle): A vehicle that uses an electric motor for propulsion instead of an internal combustion engine.
• Decarbonisation: The process of reducing carbon dioxide emissions resulting from human activity.