Want to Buy an Electric Vehicle? Well, You Might Not be Able to If North America Has No Nickel

The adoption and growth of electric vehicles (EVs) is accelerating at an unprecedented pace, but there’s a catch — nickel. The metal, essential for the lithium batteries that power the future of transportation, is at risk of running short.

There is a bigger issue at stake than simply not having enough of the vital metal. Ironically, while the EV movement is greener and more sustainable, if North America does not ramp up its nickel production, it might continue to lean on coal-powered Indonesian nickel, a less eco-friendly alternative.

Current Abundance, Future Crisis

Looking back to 2021, EV demand shot up by a staggering 100%, a surprising growth rate that shocked analysts. Moreover, nickel, used extensively in the manufacturing of EV batteries, witnessed a demand spike of 15% per year. Because of the demand, it began outpacing the growth of other base metals by three to five times. That has begged the question: is the US equipped to meet this surging demand?

Greg Beischer, the CEO of Alaska Energy Metals, underscores the significance of this demand, emphasizing North America’s need to bolster its nickel resources. And it is not only to cater to the existing stainless steel demand but to satisfy this surging EV appetite. After all, the surge is projected to span decades, so there is no escaping it.

The North American Nickel Conundrum

By 2025, the US Department of Energy (DOE) predicts that America’s nickel supply will dwindle alarmingly. While that has not stopped some from arguing that we are currently experiencing a nickel surplus, the excess is not expected to last. The DOE has even labeled nickel as a critical element with a high supply risk. If unaddressed, the problem might halt the EV industry’s growth in its tracks.

Diversifying the Nickel Supply Chain

The Wall Street Journal recently shed light on the underlying issues. Not only is nickel mining an environmental concern in countries like Indonesia, but the current supply chain structure, prioritizing factory and vehicle production over nickel mining, is increasing North American dependence on Indonesian nickel.

Furthermore, as pointed out by Graham Evans, S&P Global Research Director, an over-reliance on China, which currently dominates the battery raw material market, presents both geopolitical and environmental challenges. The risk? Supply disruptions, especially from nations not always on favorable terms with the US. And any disruption can have profound repercussions on EV adoption rates.

Alaska Emerges as a Beacon of Hope

But there’s hope. Companies like Alaska Energy Metals are stepping up. Their project, “The Nikolai Project,” located in Central Alaska, could be the key to North America’s nickel woes. Historical data suggests the site might harbor vast reserves of nickel and other vital metals, and if their findings are accurate, it could be a game-changer for America’s EV ambitions.

In a race against time, projects like these are not just about business but about securing America’s energy future. The Nikolai Project, slated to publish its maiden NI 43-101 compliant inferred mineral resource in early 2024, promises significant potential. If their assessments hold, this could be a monumental step in ensuring a consistent nickel supply for North America’s EV aspirations.

The Road Ahead Is Electric (Hopefully)

If the EV revolution is to truly revolutionize transportation, the nickel conundrum needs addressing—now. The world stands at a critical juncture where 23 countries have already reached the EV tipping point. The future looks promising, but only if we can ensure an uninterrupted domestic supply of nickel.

The key to a sustainable, electric future might very well lie beneath the Alaskan soil. But one thing is clear: without domestic nickel, the promise of a greener tomorrow remains one that may not be possible to fulfill.