Paper: GS – III, Subject: Science and Technology, Topic: Emerging Technologies, Issue: EV Boom and Copper Demand.
Context:
The global transition towards electric vehicles (EVs) is accelerating as countries pursue decarbonisation and clean energy goals.
- However, this transition is creating an underappreciated constraint a looming shortage of copper, a critical input for EV batteries, motors, wiring, charging infrastructure, and power grids.
Key Highlights:
The Near Perfect Lockstep Between EV Sales and Copper Demand:
- Elasticity Estimates: The relationship between EV sales growth and copper demand is nearly one-to-one, as reflected in elasticity estimates.
- Copper Demand Elasticity: Between 2016 and 2024, the copper demand elasticity with respect to EV sales mostly exceeded 1.0, indicating that copper consumption increased faster than EV adoption despite sustained efforts to reduce metal intensity.
- Surge in Copper Demand: During this period, EV-related copper demand surged from approximately 39,000 tonnes in 2016 to over 1.1 million tonnes in 2024, while global EV sales expanded from approximately 0.75 million units to around 17 million units.
- Projected Elasticity Ease: Although elasticity is projected to ease to approximately 0.90 by 2025, as efficiency gains emerge, the absolute copper demand will continue to rise owing to the scale of EV deployment.
- Copper Intensity of EVs: EVs require four to five times more copper than internal combustion vehicles, and there are no viable large-scale substitutes available.
Reshaping of Global Market Dynamics (Pointwise Summary):
- China has emerged as the dominant force in EV adoption and copper consumption, reshaping the global power balance.
- China’s EV-related copper demand rose sharply from about 78,000 tonnes in 2020 to nearly 6,78,000 tonnes in 2024 and is projected to reach around 7,80,000 tonnes by 2025, accounting for almost 60% of global demand.
- This dominance is driven by strong EV sales and China’s control of over 70% of global battery cell production, supported by an integrated supply chain.
- By 2025, EV-related copper demand is expected to reach about 2,10,000 tonnes in the EU and 1,14,000 tonnes in the U.S., while India’s demand remains relatively modest at around 7,200 tonnes.
The EV revolution is both a technological and resource-intensive shift, with copper emerging as a critical pillar of electrification. If scarcity is not addressed through sustainable mining, recycling, and innovation, the clean energy transition risks being constrained by resource limits rather than policy ambition.
Source: (The Hindu)
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