Green
The Massive Impact of EVs on Commodities in One Chart
The Massive Impact of EVs on Commodities
How demand would change in a 100% EV world
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
What would happen if you flipped a switch, and suddenly every new car that came off assembly lines was electric?
It’s obviously a thought experiment, since right now EVs have close to just 1% market share worldwide. We’re still years away from EVs even hitting double-digit demand on a global basis, and the entire supply chain is built around the internal combustion engine, anyways.
At the same time, however, the scenario is interesting to consider. One recent projection, for example, put EVs at a 16% penetration by 2030 and then 51% by 2040. This could be conservative depending on the changing regulatory environment for manufacturers – after all, big markets like China, France, and the U.K. have recently announced that they plan on banning gas-powered vehicles in the near future.
The Thought Experiment
We discovered this “100% EV world” thought experiment in a UBS report that everyone should read. As a part of their UBS Evidence Lab initiative, they tore down a Chevy Bolt to see exactly what is inside, and then had 39 of the bank’s analysts weigh in on the results.
After breaking down the metals and other materials used in the vehicle, they noticed a considerable amount of variance from what gets used in a standard gas-powered car. It wasn’t just the battery pack that made a difference – it was also the body and the permanent-magnet synchronous motor that had big implications.
As a part of their analysis, they extrapolated the data for a potential scenario where 100% of the world’s auto demand came from Chevy Bolts, instead of the current auto mix.
The Implications
If global demand suddenly flipped in this fashion, here’s what would happen:
| Material | Demand increase | Notes |
|---|---|---|
| Lithium | 2,898% | Needed in all lithium-ion batteries |
| Cobalt | 1,928% | Used in the Bolt's NMC cathode |
| Rare Earths | 655% | Bolt uses neodymium in permanent magnet motor |
| Graphite | 524% | Used in the anode of lithium-ion batteries |
| Nickel | 105% | Used in the Bolt's NMC cathode |
| Copper | 22% | Used in permanent magnet motor and wiring |
| Manganese | 14% | Used in the Bolt's NMC cathode |
| Aluminum | 13% | Used to reduce weight of vehicle |
| Silicon | 0% | Bolt uses 6-10x more semiconductors |
| Steel | -1% | Uses 7% less steel, but fairly minimal impact on market |
| PGMs | -53% | Catalytic converters not needed in EVs |
Some caveats we think are worth noting:
The Bolt is not a Tesla
The Bolt uses an NMC cathode formulation (nickel, manganese, and cobalt in a 1:1:1 ratio), versus Tesla vehicles which use NCA cathodes (nickel, cobalt, and aluminum, in an estimated 16:3:1 ratio). Further, the Bolt uses an permanent-magnet synchronous motor, which is different from Tesla’s AC induction motor – the key difference there being rare earth usage.
Big Markets, small markets:
Lithium, cobalt, and graphite have tiny markets, and they will explode in size with any notable increase in EV demand. The nickel market, which is more than $20 billion per year, will also more than double in this scenario. It’s also worth noting that the Bolt uses low amounts of nickel in comparison to Tesla cathodes, which are 80% nickel.
Meanwhile, the 100% EV scenario barely impacts the steel market, which is monstrous to begin with. The same can be said for silicon, even though the Bolt uses 6-10x more semiconductors than a regular car. The market for PGMs like platinum and palladium, however, gets decimated in this hypothetical scenario – that’s because their use as catalysts in combustion engines are a primary source of demand.
Agriculture
Fertilizer: Why it’s More Important than You Think
Fertilizer usage dates back to as early as 6,000 to 2,400 BC and remains just as crucial for crop production today.
Fertilizer: Why It’s More Important Than You think
The global population is expected to reach nearly 10 billion people by 2050. So, in order to feed our growing world sustainably, increased crop production is essential.
Over recent decades, farmers have been able to more than double their production of crops thanks to fertilizers and the vital nutrients they contain.
When crops are harvested, the essential nutrients are taken away with them to the dining table, resulting in the depletion of these nutrients in the soil. To replenish these nutrients, fertilizers are needed, and the cycle continues.
The above infographic by Brazil Potash shows the role that each macronutrient plays in growing healthy, high-yielding crops.
Food for Growth
Nitrogen, phosphorus, and potassium (NPK) are three primary macronutrients that are the building blocks of the global fertilizer industry. Each plays a key role in plant nutrition and promoting crop growth with higher yields.
Let’s take a look at how each macronutrient affects plant growth.
| Nutrient | Why it’s needed? | What does it do? | What happens without it? |
|---|---|---|---|
| Nitrogen (N) | Needed for the formation of all plant and animal proteins. | Nitrogen ensures that energy is available when and where it is needed to maximize yield and regulate water and nutrient uptake. | Nitrogen deficiency in crops causes stunted and spindly plants, low protein content in seed and vegetative parts, and fewer leaves. |
| Phosphorus (P) | Vital for plant photosynthesis. | Phosphorus allows plants to convert the sun’s energy into food, fiber, and oil. It improves how efficiently the plant absorbs water and macronutrients such as nitrogen. | Phosphorus deficiency causes stunted growth, reduced crop yields, low quality harvests, and moisture stress. |
| Potassium (K) | Essential for robust high quality crops. | Potassium helps regulate water pressure in plant cells and maximizes crop yields by strengthening plant stems to make them more resilient to drought, flooding, and temperature swings. | Potassium deficiency causes a slower growth rate of plants, delayed pollination and maturity, underdeveloped leaves, reduced crop yields, weakened stalks, and moisture stress. |
If crops lack NPK macronutrients, they become vulnerable to various stresses caused by weather conditions, pests, and diseases. Therefore, it is crucial to maintain a balance of all three macronutrients for the production of healthy, high-yielding crops.
The Importance of Fertilizers
Humans identified the importance of using fertilizers, such as manure, to nourish crops dating back to nearly 6,000 to 2,400 BC.
As agriculture became more intensive and large-scale, farmers began to experiment with different types of fertilizers. Today advanced chemical fertilizers are used across the globe to enhance global crop production.
There are a myriad of factors that affect soil type, and so the farmable land must have a healthy balance of all three macronutrients to support high-yielding, healthy crops. Consequently, arable land around the world varies in the amount and type of fertilizer it needs.
Fertilizers play an integral role in strengthening food security, and a supply of locally available fertilizer is needed in supporting global food systems in an ever-growing world.
Brazil is one of the largest exporters of agricultural goods in the world. However, the country is vulnerable as it relies on importing more than 95% of its potash to support crop growth.
Brazil Potash is developing a new potash project in Brazil to ensure a stable domestic source of this nutrient-rich fertilizer critical for global food security.
Click here to learn more about fertilizer and food production in Brazil.
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