Industry says EV doubts due to slowdown in investment in critical minerals

Many companies are reluctant to invest in critical minerals and energy transition projects because of uncertainty about consumer demand for electric vehicles and the government’s commitment to net-zero carbon targets, industry officials said.

The long-term picture is still sound: the world needs large quantities of materials such as lithium, cobalt and copper to stop using fossil fuels.

However, the timing of the next few years remains in question, they said at the World Materials Forum in Paris last week.

The European Union and 12 US states are seeking to ban sales of new gasoline-powered cars by 2035, but there has been resistance to these goals.

“I think there is a lot of skepticism at the moment that this will happen. That makes investing very difficult,” Mathias Medrich, former CEO of Belgian recycling and battery materials group Umicore, told the conference.

In May, Meidrich stepped down from Umicore, which cut its 2024 earnings forecast the following month due to weaker demand expectations for battery materials due to a slowing electric vehicle market.

Sales of new battery-powered electric cars in the European Union fell by 12% in May compared to the previous year.

“Financing wasn’t a big problem a few years ago,” said Stephane Michel, head of TotalEnergies’ gas and renewables unit. “You can still find capital now, but you have to have the right project.”

TotalEnergies is part of a joint venture to produce EV batteries from ACC, including carmakers Stellantis and Mercedes, which last month shelved plans to build factories in Germany and Italy.

Many companies are assuming there will be a delay of about two years in the energy transition with 2030 forecasts now being pushed to 2032, an executive at a major European chemical group that supplies battery materials said.

“That’s the view now, but it could change and become more serious, it’s hard to say,” the executive told Reuters, declining to be named because he was not authorized to speak to the media.

Demand for critical materials in China and Asia has been better than in Europe and the United States, said an executive at a global company that makes electric vehicle battery materials.

“The question is where do we put our next capacity. We have to be very fast, the market is moving very fast,” he said.

—Eric Onstad, Reuters