Challenge four: Supply chain and batteries
The availability of battery-grade raw materials has been a much-reported concern in the media lately. However, DNV expects that the sustained high prices of critical minerals will incentivize investors to fast-track their mining and refining projects, and the gap between the supply and demand will diminish over the coming years. This will not alleviate all near-term shortages: for example, the production of lithium carbonate and nickel will increase considerably in the coming decade, but short-term supply imbalances will occur due to burgeoning EV demand.
Traditionally, lead times for mining projects have been 8-10 years to production. However, time to market for lithium and similar projects will be accelerated by the massive infusion of capital for clean technology, advances in industrial digitalization, a ready market, and a relatively low break-even period for early producers.