
Hillcrest Energy Technologies. (CSE: HEAT)
From concept to commercialization, Hillcrest is investing in the development of energy solutions that will power a more sustainable and electrified future.
Electric vehicles were expected to boost the demand for metals such as lithium, nickel, and cobalt. However, the prices of these three battery metals have fallen to such a low level that producers are cutting production and delaying new projects.
This is partly an issue of oversupply. The explosive price increases in 2021 and 2022 led to excessive new capacity coming online too quickly.
But it’s also a demand problem. The transition from internal combustion engines will not come to a standstill. According to consulting firm Rho Motion, global sales of new energy vehicles increased by 20% year-on-year from January to August.
Pure electric vehicle (BEV) sales have fallen short of expectations due to buyers’ concerns about limited range and insufficient charging infrastructure. In contrast, hybrid vehicles and plug-in hybrid vehicles, which are equipped with both batteries and internal combustion engines, have gained significant popularity.
Data from Rho Motion shows that in the first eight months of 2024, global BEV sales growth slowed to 10% year-on-year, while sales of plug-in hybrid electric vehicles (PHEVs) surged by 46%.
This trend is led by China, the world’s largest electric vehicle market. A key driving factor is the emergence of extended-range electric vehicles (EREVs), which can achieve a range of over 1,000 kilometers (621 miles).
According to data from research institutions, extended-range electric vehicles currently account for 31% of all plug-in hybrid vehicle sales in China, and the company expects them to achieve similar success in Europe and the United States.
As the structure of new energy vehicles evolves, battery chemistry is also changing. According to the International Energy Agency (IEA), lithium iron phosphate (LFP) batteries have become the rising star in the battery industry, accounting for about 40% of battery demand in 2023, more than double their share in 2020. The only key metal input for LFP batteries is lithium, as they do not require nickel or cobalt, making LFP batteries cheaper and more environmentally friendly than others.
The market has taken notice of this shift. In light of China’s move toward LFP technology, forecasts for the demand for nickel and cobalt in batteries have been steadily revised downward over the past year.
So far, electric vehicle batteries made by European and American automakers still rely on high-nickel chemistries, but this may be starting to change. Both Ford and General Motors have expressed interest in using CATL’s LFP technology.
More importantly, the battery revolution is just beginning. Battery manufacturers are heavily investing in research and development with the aim of creating cheaper and more powerful batteries. As Chinese companies like CATL and BYD expand their production capacities for new technologies, lithium also faces the risk of being replaced by sodium-ion batteries.
According to the International Energy Agency, sodium-ion batteries could be up to 20% cheaper than existing technologies, suitable for stationary energy storage and compact urban electric vehicles. While they do not use lithium, they require nickel and manganese based on their chemical properties, suggesting that more metal twists may emerge in the unpredictable electric vehicle revolution.