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How a Battery Metals Squeeze Puts EV Future at Risk

Bags of nickel sulfate in South Korea.

Bags of nickel sulfate in South Korea.

Photographer: SeongJoon Cho/Bloomberg

The world’s epic shift into electric vehicles needs to overcome a major obstacle: how to meet rocketing demand for batteries, the vital component, while cutting the cost to help the cars go mainstream. Factory lines churning out power packs to fuel a clean energy future are being built faster than strained supply chains can keep up. A global rush to lock in stocks of lithium, nickel, cobalt and other key ingredients from a handful of nations has sent prices hurtling higher. There are major concerns over China’s industry-wide dominance and moves in some other countries to restrict mineral exports in hopes of building their own manufacturing base. It’s a scenario that risks slowing the pace of EV adoption.

Miners and refiners were wary of big investments after a spending wave last decade swamped demand and triggered a years-long slump. Now, battery production is being ramped up so fast there have been shortages of specialist materials like copper foil, and more importantly metals needed for battery chemicals. While factories can be built in about 18 months, mines can typically take seven years or longer to come online. Then there’s pandemic-related disruptions, shipping snarls and trade restrictions. Thus, the current scarcity — and high prices.