The Critical Materials Price Index tracked by Project Blue dropped to a 12-month low in May, but the energy transition market intelligence company now believes last month marked a bottom in the cycle for the basket of 30 metals and minerals… The index reached a high in March last year, spurred by a post-covid recovery but was quickly dragged down by a weakening global macroeconomic picture, surging energy costs and a less than inspiring recovery in China, responsible for the bulk of consumption in most sectors…The cobalt market could be at an inflection point. After sharp pullbacks – prices for cobalt concentrate exported to China is down a whopping 75.4% while prices for LME metal have dropped 57% – Project Blue is finding evidence that payables are now creeping up, thanks to logistical issues in the Congo…Reuters reported in late May that the DRC government has plans to hike its stake in Sicomines joint venture with Chinese firms from 32% to 70% as part of an overhaul of the central African nation’s $6 billion infrastructure-for-minerals agreement…The Tshisekedi Government appears concerned that too much of the DRC’s copper and cobalt resources were given away during the Kabila era, with little benefit to the country, says Project Blue…The DRC also halted Eurasian Resources Group’s Boss Mining copper-cobalt project over environmental concerns but “the suspension is unlikely to impact the cobalt market much as things stand but could remove roughly 2–3 kilotoness of material from an oversupplied market in 2023.”…Project Blue says current cobalt prices probably constitute a floor and the market will stabilise over the coming weeks.

As the uptake of EVs steadily increases and participants across the battery raw materials supply chain are looking to a more sustainable future, all eyes are on the lithium-ion battery recycling market…Lithium cobalt (LCO) and nickel cobalt manganese (NCM) black mass is more valuable in terms of the contained battery metals than lithium iron phosphate (LFP) black mass…Electrification of transport and the rapid development of energy storage systems (ESS) are driving demand for lithium-ion batteries. Fastmarkets forecast demand for lithium-ion batteries to grow 5-fold from 821 gigawatt hours in 2023 to 4,328 gigawatt hours in 2033 at a compound annual growth rate (CAGR) of 16%. This rapid growth has led to a steep increase in demand for battery metals such as lithium, nickel and cobalt…Recycling (secondary metal) can supplement mining (primary metal) providing security of supply to regions that might not be naturally rich in these metals. Consumer electronics batteries have the shortest lifespan of about 2-5 years, whereas EVs is 10-15 years and ESS 15-20 years, meaning a longer wait for these batteries to be available for recycling…While the recycling market has seen significant investments recently, it still only accounts for less than 5% of total battery metal production…Production scrap currently accounts for 73% and end-of-life (EoL) 27% of all battery scrap…In a well-established gigafactory, roughly 5% of cells, packs and batteries will not pass checks, whereas in a new gigafactory this could be as high as 30%. These batteries will be immediately available for recycling as production scrap. 

General Motors plans to open a fourth battery plant in the US heartland, part of its programme to chase Tesla on electric vehicle sales by following a similar playbook. Billionaire Elon Musk’s car company pursued a strategy of vertical integration over the past decade that helped make the Tesla Model 3 the best-selling EV in the country. More than three years ago GM, too, began building out its North American supply base for electric vehicles, constructing factories and striking deals to secure the raw materials to feed them…It will have six models eligible for the full $7,500 tax credit available to consumers through the landmark Inflation Reduction Act — more than Ford, Volkswagen, Rivian or Tesla…GM “has absolutely been more aggressive than any other automakers aside from Tesla” in vertically integrating, Abuelsamid said…For its strategy to succeed, GM must show it can churn out EVs en masse. Barra has said it will be producing 1mn EVs annually in 2025…GM has been moving upstream, too, as it tries to secure access to the components and minerals necessary to make batteries…“If you’d ask us three years ago or four years ago if we would be directly engaged with mining companies, we would have clearly said no, but sometimes necessity is the mother of invention,” Kunjur said. “We had to change our mindset.”…Creating a US supply chain for EV batteries requires significant investment, Kunjur said, and the IRA “definitely helped”…GM and LG Chem are eligible for the second-highest amount in production subsidies this year, at an estimated $480mn. 

Ford Motor Executive Chairman Bill Ford said the United States was not ready yet to compete with China in the production of electric vehicles…"They developed very quickly, and they developed them in large scale. And now they're exporting them," Ford told CNN's 'Fareed Zakaria GPS' Sunday program. "They're not here but they'll come here we think, at some point, we need to be ready, and we're getting ready," Ford said…In February, the automaker announced plans to invest $3.5 billion to build an electric vehicle battery plant in Michigan in a deal which involved using technology from Chinese battery company CATL , attracting attention from U.S. Senator Marco Rubio who asked the Biden administration to review the deal…"I think we see the Chinese as the main competitor, not GM or Toyota. The Chinese are going to be the powerhouse," he said.

It’s not just price and range holding back the hundreds of millions of people who live in the thousands of small cities and rural towns across China. A lack of charging infrastructure and dealerships (many EV makers prefer a Tesla Inc.-like direct online sales channel) also deter people from going electric. Then there’s the mismatch between the sleek, tech-laden EVs popular in the wealthy metropolises of Shanghai and Shenzhen with the need for more rugged and practical vans and light trucks needed to haul everything from work tools to farm goods in rural areas…While China has the world’s largest clean car market, selling 5.67 million such vehicles in 2022, sales have been concentrated in big cities. Overall growth is slowing and the penetration of EVs in less-developed regions is still relatively low — at 21% of new car sales in the first four months of 2023, compared to around 40% in the largest cities, according to BloombergNEF. Closing that gap is key toward China’s goal of reaching net zero emissions by 2060 and supporting the nation’s auto industry…To jump-start sales, the central government launched the “Green Cars Going Rural” sales campaign on June 15, where auto companies and local governments will promote 69 electric and plug-in hybrid models through live-streaming and offline showcases. Most of them are micro cars, sedans and SUVs, with about 10 minivan and light trucks models…This follows a nationwide drive to promote overall car sales and the extension of tax breaks on new-energy vehicle purchases. The country’s economic planning agency said more support is on the way to stabilize car demand and building of charging infrastructure. Carmakers like Tesla have offered discounts on select models to get stock moving…Unlike densely populated cities where it’s hard to find parking and access a home charger, villages and towns have more standalone houses where a charger can be installed. EVs are also cheaper to run than petrol or diesel-fueled cars, helping people in lower-income rural areas…EVs will take off in small-town China once models get larger, with longer range and better pricing.