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How Innovation in EVs Is Reshaping the Copper Market?

Published: 7.12.2023

The rise of electric vehicles (EVs) has been seen as a boon for the copper market, as EVs use four times as much copper as traditional gasoline-powered vehicles. However, new innovations in EV design and manufacturing could be starting to dent copper demand growth.

One of the biggest drivers of copper demand in EVs is the wiring harness, which is used to connect all of the electrical components in the vehicle. However, new advances in battery technology and electric motor design are making it possible to use smaller and lighter wiring harnesses, which require less copper.

In addition, some EV manufacturers are starting to use alternative materials to copper in the wiring harness, such as aluminum and plastic. These materials are lighter and less expensive than copper, and they can also be easier to recycle.

As a result of these innovations, Goldman Sachs has revised its forecast for copper demand from EVs. The bank now expects copper demand from EVs to reach 2.8 million metric tons by 2030, down from its previous forecast of 3.2 million metric tons.

While this is still a significant amount of copper demand, it is lower than what many had expected. This suggests that the copper market may not benefit as much from the growth of the EV market as previously thought.

It is still too early to say for sure what the long-term impact of innovation in EVs will be on copper demand. However, it is clear that the market is changing, and copper producers will need to adapt to these changes in order to remain competitive.

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