Context:

• The rapid global shift to electric vehicles is driving an unprecedented surge in copper demand, as the metal is essential for EV batteries, motors, wiring, charging networks, and power grids.
• While EV sales have grown exponentially over the past decade, copper supply has lagged due to underinvestment, declining ore quality, and long mine development timelines.
• This mismatch could trigger a structural copper deficit as early as 2026, reshaping global trade, intensifying geopolitical competition, and potentially slowing or raising the cost of the EV transition.
• This article highlights how the rapid global shift to electric vehicles is triggering an underappreciated copper crunch, as soaring EV demand collides with slow-moving supply, creating a structural risk to electrification, trade, and climate goals.

EV Sales and Copper Demand in Lockstep

• The electric vehicle transition shows a strong, near one-to-one relationship between EV sales growth and copper demand.
• From 2016 to 2024, copper demand rose faster than EV adoption, with elasticity mostly above 1.0, despite efficiency improvements.
• Rising Copper Intensity of Electrification
  • EV-related copper use jumped from about 39,000 tonnes in 2016 to over 1.1 million tonnes in 2024, alongside EV sales growth from 0.75 million to nearly 17 million units.
  • The peak elasticity in 2019 reflected larger batteries, more power electronics, and rapid charging infrastructure.
• Structural Pressure on Copper Supply
  • Even as elasticity moderates with efficiency gains, absolute copper demand will keep rising due to scale.
  • EVs use four to five times more copper than conventional vehicles, with no viable substitutes, making copper a key constraint on global electrification.

Supply–Demand Imbalance in the Copper Market

• Global copper demand is rising rapidly, while supply growth has slowed, creating a widening structural gap often described as a “jaw-opening deficit”.
• This imbalance marks the start of a prolonged copper shortage phase.
• Why Supply Is Falling Behind - Supply growth is constrained by declining ore grades at existing mines, long 10–15 year timelines for new projects, and environmental opposition in key producers such as Chile, Peru and the United States.
• From Surplus to Severe Deficit - In 2024, global copper supply is expected to exceed demand by about 0.3 million tonnes. By 2026, demand may reach 30 million tonnes, while supply lags near 28 million tonnes.
• A Rapidly Widening Gap - The deficit could widen to 4.5 million tonnes by 2028 and nearly 8 million tonnes by 2030 — equivalent to the combined output of the world’s ten largest copper mines.
• Implications for Electrification - Such shortages could raise EV costs, delay charging infrastructure, and strain decarbonisation goals. Without rapid expansion of mining, recycling and material innovation, copper scarcity may become electrification’s main bottleneck.

China at the Centre of EV-Driven Copper Demand

• The geography of EV-led copper consumption is reshaping global market dynamics, with China emerging as the dominant force.
• China’s EV-related copper demand rose from about 78,000 tonnes in 2020 to nearly 6,78,000 tonnes in 2024 and is projected to reach around 7,80,000 tonnes by 2025, accounting for almost 60% of global EV-linked copper use.
• Integrated Supply Chains and Strategic Advantage
  • China’s dominance is driven not just by EV sales but by its control of over 70% of global battery cell production and a deeply integrated supply chain.
  • This gives Beijing strong pricing power, long-term contracting leverage, and strategic influence over copper-rich regions.
• Uneven Global Consumption Patterns
  • By 2025, EV-related copper demand is expected to reach around 2,10,000 tonnes in the European Union and 1,14,000 tonnes in the United States, while India’s demand remains modest at roughly 7,200 tonnes.
  • This asymmetry reinforces China’s structural advantage.
• Copper as the Artery of the Energy Transition
  • The EV revolution is transforming not just transport but the global metals economy.
  • Copper has become the critical artery of electrification, with demand nearing levels that outpace supply in unprecedented ways.
• Resource Strategy Will Shape Electrification
  • Policymakers, investors and planners must recognise that the energy transition is inseparable from resource strategy.
  • Without decisive action on copper supply, recycling and innovation, geology—not ambition—will set the pace of electrification.