In this first part of a two-part interview for CleanTech Talk, Rodney Hooper of RK Equity talks lithium and EV battery production and supply forecasts for 2025–2030 in Europe, China, the US, and globally. Listen via the embedded SoundCloud player below, or via your preferred podcasting network (see options below).
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Rodney notes that, like others in the industry, he had to significantly increase his lithium and battery demand forecasts for 2030 after Tesla Battery Day due to Tesla’s bold targets.
He is now forecasting 2.85–2.9 million tons of lithium demand globally by 2030, which translates to 3,400 GWh of annual battery cell production.
Rodney notes that EU requirements for CO2 emissions standards imply that EV market share will need to be quite high by 2030 — 60–70%. Plus, several cities will probably be banning ICE vehicles by then.
Unfortunately, some ambitious automaker targets for 2030–2035 are basically not tied to battery orders at this point. Rodney reiterated a point he and partner Howard Klein have made previously when talking with me — that most automakers still seem to approach the battery supply chain like they approach other automotive supply chains, which is a mistake. They don’t seem to recognize that they should have orders in today for critical components of battery cells they will need even several years from now.
By 2025 at the latest, Rodney expects EVs to be cheaper than ICE vehicles even without looking at cost of ownership — just looking at upfront cost.
Furthermore, growing gas/diesel bans are likely to lead to a much steeper adoption curve by the middle of the decade.
Rodney asks an important question, “If America wasn’t comfortable being fully reliant on OPEC, why would it be fully comfortable being reliant on China for its lithium?” So, he sees a push for more lithium sourcing in North America.
Rodney also talked a bit about his satisfaction that it looks like the EU will phase out incentives for plug-in hybrids rather quickly. He had been a bit concerned that there’d be a heavy reliance on plug-in hybrids to meet CO2 standards, but that doesn’t look likely now, especially due to the news we recently covered that lawmakers are looking to give less weight/benefit to plug-in hybrids.
We also touched on the years-long battery supply crunch that has led to Tesla not being able to produce the Semi to this day. With limited battery supply, Tesla has had to focus on the Model 3 and Model Y and delay the Semi. So, the idea that batteries could be a bottleneck in the future isn’t a wild theory, as they’ve already been the explicit #1 bottleneck for Tesla for years.
Rodney also talked a bit about Tesla’s lithium extraction plans and — the matter that really excited him — Cybertruck demand. He had predicted early on that reservations would reach one million, and they now have, according to recent reports.
To end this half of the interview, we talked a bit about the US EV market. Rodney made what he called a potentially “controversial” comment, that the US and China might have about the same amount of GWh of battery capacity deployed in vehicles in 2025 even as China has about twice as many electric vehicle sales. That’s due to Americans’ obsession with large, long-range vehicles.
Rodney also talked a bit about specific mineral resources and supply options in Canada and the US. (This was a long, detailed section I’m not summarizing in depth. Listen to the podcast for all the details on that!)
To close out the US market topic, Rodney estimated that we could see 15% EV penetration in the US market by 2025. He’s forecasting 18.5% in Europe this year.