As the car industry cuts back on production because of a shortage of computer chips, the materials used in electric vehicle batteries could be the next thing to be in short supply.

A Chinese manufacturer has told Bloomberg that rising demand from electric vehicles and challenges in securing raw materials will deliver a “battery supply crunch: for automakers. “When the chip shortage is over, the major supply shortage the industry faces would be batteries,” Yang Hongxin, chairman of SVolt Energy Technology Co said in an interview. “The production capacity of battery cells will be tight in the next few years because expansion takes time.”

The report explains that demand for lithium-ion batteries from transport and energy storage will surge to as much as 5.9 terawatt-hours a year in 2030, putting a strain on supply chains, according to BloombergNEF in an annual New Energy Outlook report published this week.

It says availability of sufficient lithium products, copper foil and some cathode materials could become a constraint on the battery sector’s efforts to keep pace with demand. Yang adds that current high raw material prices may not ease until the second half of next year and “the price pressure will have to be shared along the supply chain.”

All key battery metals have seen prices advance over the past year, with lithium carbonate in China more than doubling.

(Picture – Highways News)