'It's just outlandish' - Matt Watson on EV uptake and mineral demand

Never mind the current rush into electric vehicles, coming regulations are going to drastically increase EV adoption and mineral demand, said Matt Watson, founder of Precious Metals Commodity Management.

On Friday Watson recorded Kitco Roundtable with Mining Audiences Manager Michael McCrae and Kitco correspondent Paul Harris.

In the seven months up to July, global sales of electric vehicles were up 150% to just over 3 million units, compared to the same period in 2020, with about 1.3 million sold in China, according to the consultancy Rho Motion and reported by Reuters. And in Norway sales of EVs have been so successful, trends point to 100% market share by spring at the expense of internal combustion engine sales.

Consequently battery metals have been on a tear. Lithium is up 159% for the year based on Benchmark Lithium Price Tracker.

Watson estimates that EV penetration currently sits between 4% to 5%.

"I think the message is: you haven't seen anything yet. By 2030 to hit the zero emission mandates that have been put into place by different governments, 25% penetration is needed," said Watson.

"And then jumping ahead to 2035, then the numbers get really silly. Then you need 62% of the global feet transitioned to EVs."

"In terms of total aggregate mineral demand [to build these EVs], it's just outlandish."