The Electric Vehicle (EV) revolution, fueled by the pursuit for a greener planet, is expected to impact the supply chain of multiple commodities. The most commonly discussed EV-related commodities are nickel, cobalt, lithium, and graphite. In this report, we review three relatively under-followed commodities – Rare Earth Elements (REEs), niobium, and fluorspar. EVs are expected to be their biggest long-term demand driver.
We are projecting a large supply deficit for REEs and fluorspar; both are currently used in EVs. Niobium demand is currently driven by steel, but niobium batteries (which are under development), if commercialized, will push the market to a significant supply deficit. Commodity price projections are beyond the scope of this report.
EV sales surged 168% YoY, to 2.65M, in H1-2021. The International Energy Agency (IEA) forecasts 145M EVs on the road by 2030, up from just 11M in 2020.
Neodymium-Iron-Boron rare earth magnets (NdFeB or neo-magnets) are an essential component of EVs, due to their superior strength per unit weight and volume. Each EV requires approximately 10 kg of REEs.