The mining industry needs to invest $100 billion to $150 billion to meet the demand for electric vehicles

A few days ago, consulting firm McKinsey warned people in a statement that the rise of electric vehicles brings surprising three resource problems
.

The mining industry needs to invest $100 billion to $150 billion to meet the demand for electric vehicles

First, oil and gas investors will be able to rest assured for at least the next decade, as the impact of the shift away from internal combustion engines will only modestly affect demand
for fossil fuels.

In fact, if half of the vehicles on the road in the U.
S.
were electric vehicles, all of which would need to be recharged, demand for natural gas power stations would increase by 20 percent
.
McKinsey said even the coal industry will be hit
by electric vehicles.

Second, China alone plans to build 4.
8 million by 2030 due to the need for millions of public charging stations, which may create the possibility of land scarcity, as gas stations of current standard size require multiple 120-kilowatt fast charging stations equipped with eight power outlets
.

McKinsey estimates that since battery costs account for 40-50% of the average vehicle cost, the cost of batteries will have to fall from $220-225/kWh today to less than $100 per kWh to achieve parity
with the cost of internal combustion engine vehicles.

Finally, McKinsey raised questions about whether the supply of cobalt, lithium, copper, nickel and rising raw material prices will limit greater penetration of electric vehicles
.

Optimistically, no
.
Even with rising input costs, batteries could still be close to the $75 to $
100 per kilowatt threshold for parity with internal combustion engine vehicles.

Despite concerns such as the "cobalt cliff" and the potential for temporary rapid inflation from demand impacts, these constraints and uncertainties should be solvable
.

In addition, switching to other battery chemistries can reduce the risk of
shortages.
We also need to dig up more raw materials, which is estimated to require an investment of $100 billion to $150 billion
.

Similarly, difficult realities of the mining industry remain, including years-long delivery times and ecological and social issues
in Africa and South America.
And these areas are where most of the raw materials are found
.

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