The electric vehicles produced by Tesla and other car companies are designed so that they have a lower copper content, which limits the demand for this metal, according to analysts cited by Reuters, informs News.ro.
Strong growth in electric vehicle sales, led by China’s lead, means copper demand will continue to rise for the rest of the decade, but innovation in electric vehicles has emerged as a limiting factor, two recent forecasts show.
Copper has been seen as a green energy transition play, in part because of the cables needed for electric cars.
Electric vehicles can use up to 80 kilograms of copper, four times the amount used in an internal combustion engine vehicle.
In a report this week, Goldman Sachs said electric vehicles accounted for two-thirds of the increase in global copper demand last year.
They found the solution to reduce copper
But electric vehicle and battery makers have found ways to cut weight and costs, which also means less copper is needed per vehicle, Goldman Sachs and consultancy CRU Group said separately.
The CRU Group lowered its estimate for copper use in an average electric vehicle to 51-56 kilograms between this year and 2030.
The estimate is lower than the previous forecast of 65-66 kg for the same period.
According to Goldman Sachs, the amount of copper in an average electric vehicle will drop to 65 kg per vehicle by 2030, compared to an estimate of 73 kg last year.
Both cited a chain of engineering changes aimed at improving range, reducing weight and increasing the efficiency of electric vehicles, which will have the cumulative effect of reducing copper content.
“It could be the first crack in the story, in terms of demand,” said CRU analyst Robert Edwards.
“Some of the projections out there were very aggressive in terms of the potential demand for green energy (for copper).”
Engineering changes include moving to more compact batteries, where the cells do not need to be connected in modules, using thinner copper foil in the battery cells, and moving to higher voltage systems that will require less wiring.
In one example, Tesla expects that by switching to a 48-volt system for the secondary battery – the smaller battery used to power functions such as lighting and wipers – in future electric vehicles, it will be able to cut the need for copper by a quarter from current levels, Elon Musk told investors in May.
Goldman Sachs called innovation in batteries and the potential shift to higher voltage systems, such as in the case of Tesla, “the main threat to copper demand for electric vehicles.”
Copper demand for electric vehicles is estimated at 1 million tons this year and 2.8 million by 2030.
Previously, the estimate was for copper demand of 3.2 million tonnes for electric vehicles in 2030.
However, a higher vehicle penetration rate offsets the reduction in copper use per vehicle.
CRU expects electric vehicles and plug-in hybrids to account for 42% of vehicles sold globally in 2030, up from a third previously estimated.
Edwards said some copper bulls may have underestimated the potential for electric vehicle makers to roll out technologies that limit the metal’s use.
Benchmark copper for three-month delivery on the London Metal Exchange rose to a record high of $10,845 a tonne in March 2022, partly on optimism about demand for electric vehicles, but fell by nearly a quarter since then.
2023-07-09 14:15:38
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