Battery materials play a key role in the spread of electric cars

The spread of electric cars has continued to increase significantly, creating a unique battery ecosystem in Finland, Vesa Koivisto, SVP of Battery Operations, writes in our blog.

Vesa Koivisto, Senior Vice President, Battery Operations, Finnish Minerals Group

Few industries are as fast-paced as the electric car (EV) industry. In 2012, approximately 130,000 EVs were sold worldwide, whereas today the same number of EVs is sold in one week. Despite the challenges in supply chains, EV sales doubled last year. According to the International Energy Agency (IEA), approximately 6.6 million EVs were sold worldwide in 2021.

The EU is committed to reduce the net amount of greenhouse gas emissions by 55% by the year 2030 compared to 1990 levels, and Europe aims to be the world’s first carbon neutral continent by 2050. To reach the targets, more environmentally friendly modes of transport are needed.

Until now, policy objectives, such as the Paris Agreement and the European Green Deal, have been the primary way to encourage people to choose low-emission vehicles. According to IEA, 17% of the cars sold in Europe last year were EVs, when including plug-in hybrid EVs.

The transition phase also encourages car manufacturers to make enormous strides in the development of even better technologies, and many of them have, in fact, set ambitious sales targets for EVs.

For instance Volkswagen and Ford, among the traditional car manufacturers, estimate that about 50% of their car sales will come from EVs in 2030. As for Toyota, the company strives to sell 3.5 million EVs annually by 2030.

Moreover, the growing demand for EVs creates opportunities for new car manufacturers – in addition to the well-known Tesla – that have emerged especially from Asia.

Shortage of materials threatens the spread of EVs, unless investments make progress

Quick changes and the ambitious climate targets create challenges as well.

The IEA estimates that if sufficient investments in expanding the production of minerals are not made, the world will see a shortage of lithium and cobalt already by 2025. The demand for nickel, manganese and aluminium is also increasing globally. In the worst-case scenario, minerals could create a bottleneck, which might hamper the transition to more environmentally friendly transportation in the future.

The world needs more sustainable battery materials, whose production is based on minerals. Therein lies one of Finland’s distinct competitive advantages and future export opportunity.

Finnish ecosystem is looking good already

In Finland, we are working persistently to establish an integrated ecosystem. Additionally, we invest particularly in the development of the traceability of minerals.

Our subsidiary, Terrafame, already produces nickel and cobalt sulphates from the ore it mines. Finnish Minerals Group is collaborating with CNGR Advanced Material to plan the Hamina plant, which is slated to produce precursor cathode materials used in battery products. In addition, we are advancing the plant project in Kotka together with Beijing Easpring, aiming for the manufacturing of cathode active materials. Our joint objective with FREYR Battery is to establish a battery cells production plant in Vaasa.

However, this is not the full extent of the Finnish battery ecosystem. For example, Valmet Automotive already assembles battery packs and EVs, and after the useful life of the vehicle, Fortum recycles the materials and uses them to produce battery chemicals for precursor production.

As a whole, our unique ecosystem supports the green transition and the electrification of transportation in Europe.

Vesa Koivisto

Vesa Koivisto

SVP, Battery Operations