Understanding the supply chain complexity of the global EV market

Home|Understanding the supply chain complexity of the global EV market

By 2027, battery metals are expected to reach a global market value of nearly US$18 billion. As this market continues to grow exponentially, supply chain security has become increasingly important, especially as Western countries transition to clean energy and try to shift away from reliance on China.

Ross Gregory, a partner at the consultancy firm New Electric Partners in South Korea, is the guest on the latest Opportunité Africa podcast. ‘Many minerals used in batteries are mined in Africa and elsewhere, but there’s still a dependence on China for the processing of those materials,’ he says. ‘China also has the ability to consume everything made in its own market. In that sense, the risk for the EU and the US issimply a market risk rather than a geopolitical one.’

Gregory notes that new supply chains need to emerge from traditional mining-only hubs like Africa, with full traceability of raw materials and improved processing capability – both environmentally and economically. But he admits it’s easier said than done. ‘Traditionally, the battery manufacturers have been entering into off-take agreements without having to invest upstream. That was fine when there was ample material in the market to supply the early stages of the EV evolution, but the world has changed.’ Gregory notes ‘It’s going to be a painful transition’ until cell and auto OEMs familiarise themselves with upstream investments

A solution to this challenge is for upstream African miners to join hands with the right joint-venture partners for midstream and downstream chemical processing to establish supply chain integrity in the lithium-ion battery ecosystem. ‘For investors, identifying a good quality battery mineral project and the right partner for value added processing is key to success.’

Listen to the full interview and subscribe to the podcast.

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