The EV market is one of the biggest drivers in reducing oil consumption worldwide. EV vehicle sales are roughly 5%, but the expectation is for this to grow dramatically to somewhere between 39 and 59% by 2030.
The growth of the EV industry is unsurprising when you consider how governments are looking to the EV industry to reduce carbon emissions rates significantly. For example, the UK has brought forward the ban on selling new petrol and diesel cars from 2040 to between 2030 and 2035. This type of government legislation has added to the need to ramp up the manufacturing of electric vehicles significantly over the coming years.
While this growth looks like the right direction when helping climate change, issues are already causing a potential market slowdown. Throughout 2022, EV manufacturers have already raised the concern of supply chain issues when discussing ramping up production. Companies have lowered targets and expectations in light of the problem.
Battery running low warning
With the EV market's growth, the battery value chain is expected to also increase as much as ten times over the next ten years. The cost of batteries is already high for EV manufacturing. from July 2022 alone, the price of battery-grade lithium grew by over 400 per cent year on year.
The cost of raw materials has been increasing, with access to raw materials for battery builds being a real issue. It hasn't just been lithium which has jumped in price. Nickel and Copper have also increased to double previous costs, and with these three elements making up 50% of the battery, this is creating pricing problems for manufacturers.
Supply chain risks
Another concern regarding the supply and demand for the EV industry is that the market needs to be more cohesive. Raw materials, production and logistics are being coordinated worldwide to meet demands. The combination of issues creates bottlenecks in production around the sourcing of raw materials and resulting lead times for production and manufacturing.
With the demand growth within the EV market, there may be reasons to consider other options, including reduced quality, to meet demand. Suppliers within the chain will also need to consider ways to maintain supply growth; this may be through alternative materials such as recycled materials.
The People factor
Despite issues with materials or logistics, the demand and growth of the industry are still high. Even if the change may not be as sudden, with governments looking to EVs as a critical driver to reduce carbon emissions, the need for skilled workers across the supply chain into EV manufacturing is at an all-time high. The requirement to grow teams is a matter of urgency. The talent shortage is already an issue across multiple industries; however, when the timeline for supply is already long from sourcing, companies could find a way to recover this by building efficient, skilled teams.
The industry's growth will only continue, and businesses unable to grow with it will find manufacturers looking at competitors who can fulfil demand. Finding the workforce needed is demanding at the best of times, but finding the required skills has been difficult.
More businesses are turning to specialist talent partners to help find specific skill sets within the industry to grow with the EV industry and keep up with demand.
Zero Global has specialist consultants who work within the industry, helping partners connect with the specialist talent they need to meet demands.