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Goldman Sachs analysts has said that the growth of electric vehicles (EV) could boost demand for base metals, but warned the supply chain may struggle to meet the need for batteries, potentially slowing the expected EV boom.
In its base case scenario, the bank said lithium production would need to quadruple within 10 years to feed EV demand. “Such dramatic growth was rare in the history of commodities,” it had said in a research note. .
“Given the significant uncertainties, we would not build the additional base metals demand from EVs into our baseline before seeing a more credible path for the EV wave,” warned.
EV growth should benfit base metals, as nickel is used in batteries, copper in electrical wiring and aluminum in reducing the weight of cars.
The bank said nickel demand could increase by 200,000 -300,000 tonnes by 2025, and copper by 850,000 tonnes-1.25 million tonnes, according to its base and bull case scenarios.
