The Role of Copper in the EV Revolution

The transition to electric vehicles (EVs) is celebrated as a crucial step towards a sustainable future. However, this shift is also creating a significant and often underestimated challenge: a looming copper shortage.

Importance of Copper

• Copper's Role: Copper is essential for electrification, forming the backbone of EV batteries, motors, wiring, charging infrastructure, and power grids.
• Demand Surge: As EV adoption accelerates, copper demand is growing exponentially, a fact underestimated by many policymakers and markets.

EV and Copper Demand Dynamics

• Growth Statistics: From 2015 to 2025, global EV sales increased from 0.55 million to an estimated 20 million units, with copper consumption rising from 27.5 thousand tonnes to over 1.28 million tons.
• Growth Elasticity: Between 2016 and 2024, copper demand elasticity with respect to EV sales mostly exceeded 1.0, indicating faster growth in copper consumption than EV adoption.
• Demand Projection: Despite efficiency gains, copper demand will rise due to the scale of EV deployment, as EVs require four to five times more copper than internal combustion vehicles.

Supply Challenges

• Supply Deficit: Decades of underinvestment, declining ore grades, and long development cycles for new mines may lead to a structural supply deficit as early as 2026.
• Projected Gap: By 2030, the supply-demand gap could reach nearly 8 million tons, potentially increasing EV costs and delaying infrastructure development.

Geopolitical Implications

• China's Dominance: China leads in EV adoption and copper usage, driven by strong sales and control over 70% of global battery cell production.
• Global Power Shift: This dominance gives China structural advantages in pricing, supply contracts, and leverage over copper-rich regions.

Conclusion

• Strategic Importance: As copper becomes central to the energy transition, its access will rival battery technology in global priority.
• Action Needed: Policymakers and investors must prioritize copper supply, recycling, and technological innovation to maintain the pace of electrification.