Replacing China in copper supply chain is ‘unfeasible,’ warns WoodMac, as the West seeks shift
A worker tying copper wire rods before loading them onto a truck in Huai’an, in China’s Jiangsu Province.
Vcg | Visual China Group | Getty Images
Western countries seeking to diversify away from China’s dominance in copper could delay the energy transition besides raising costs, while its complete replacement would be ‘unfeasible,’ according to Wood Mackenzie.
China leads the world in key segments of the copper supply chain, with the critical metal serving as an important component in emerging technologies such as renewable energy, energy storage and electric vehicles.
As the U.S., Canada, Australia, and European countries seek to displace the country’s hold on copper through subsidies and investment, Wood Mackenzie warns that the dual aims of decarbonization and reduced dependence on Beijing are at odds with one another.
“Hundreds of billions of dollars in new copper processing and fabrication capacity would be required to replace China,” the natural resources’ data analytics firm said a report released on Thursday, adding that demand for the metal could grow by 75% to 56 million tons by 2050.
“This would create inefficiencies that would result in significantly higher-priced finished goods and increase the cost and timeliness of the energy transition,” it added.
Existing mines and projects under construction will meet only 80% of copper needs by 2030, according to the International Energy Agency, indicating a potential shortage of the metal.
According to Wood Mackenzie, most of the world’s initial mining of raw materials occurs primarily in the Americas and Africa, with China’s domestic mining output constituting just 8% of global production.
Though that share rises closer to 20% after accounting for China’s overseas mining assets, the country will still need to secure additional supplies to meet its needs. The rest of the world has enough primary mine supply to meet current requirements, the report said.
The copper supply chain, however, comprises several key phases, including mining, smelting and refining, fabricating, and the manufacturing of finished goods.
And what the rest of the world has in copper mines, it lacks in China’s dominance in downstream processing and manufacturing, according to the report.
“As governments and manufacturers aim to diversify away from China, it is crucial to consider the entire supply chain, not just mining operations,” said Nick Pickens, research director of global mining at Wood Mackenzie.
“While copper supply risks can be mitigated and some rebalancing has begun in various countries, the scale of China’s dominance in the supply chain means complete replacement is unfeasible.”
Molten copper flowing into molds at a smelting plant in Wuzhou, China.
He Huawen | Visual China Group | Getty Images
The report outlines that 80% of copper mining produces copper concentrate, which must be processed at smelters and refineries to produce copper cathode. Fabricators then use that material to make copper components that wind up in finished goods.
Since 2000, China has been responsible for 75% of the world’s smelter capacity growth, according to Wood Mackenzie’s data.
“A scenario without China for the copper supply chain would require a substantial increase in processing capacity to meet energy transition targets,” said Pickens.
The report said that there are currently no plans for new primary smelting capacities in North America or Europe. Instead, the U.S. has focused on secondary markets and copper recycling, recently establishing its first secondary smelter for multi-metal recycling in the country.
China also accounts for around 80% of additions in copper and copper alloy fabrication capacity globally since 2019, with it now having half of the world’s fabrication capacity.
Legislations like the Inflation Reduction Act (IRA) in the U.S. have aimed to subsidize critical mineral investments. However, with copper, such efforts have met hurdles in the U.S. and Europe due to factors such as low utilization, high operating costs, and environmental regulations, the report said.
“Pragmatism and compromise will be essential to achieve net zero goals without imposing excessive costs on taxpayers. Easing global trade restrictions could be one necessary concession,” Pickens said.
National Grid Renewables has broken ground on its 100 MW Apple River Solar Project in Polk County, Wisconsin.
The Wisconsin solar farm, which will use US-made First Solar Series 6 Plus bifacial modules, will be constructed by The Boldt Company, creating 150 construction and service jobs. Apple River Solar will generate over $36 million in direct economic benefits over its first 20 years.
Once it comes online in late 2025, Apple River Solar will supply clean energy to Xcel Energy, which serves customers throughout the Upper Midwest. According to National Grid Renewables, the solar farm will generate enough energy to power around 26,000 homes annually. It will also offset about 129,900 metric tons of carbon dioxide emissions each year – equivalent to taking 30,900 cars off the road.
“We are excited to see this project begin as it underscores our dedication to delivering clean, reliable and affordable energy to our customers,” said Karl Hoesly, President, Xcel Energy-Wisconsin and Michigan. “This project is an important step in those goals while bringing significant economic benefits to Polk County and the local townships.”
Electrek reported in February that Xcel Energy, Minnesota’s largest utility, expects to cut more than 80% – and possibly up to 88% – of its emissions by 2030, putting it on track to hit Minnesota’s goal of net zero by 2040. It also says it’s on track to achieve its clean energy goals for all the Upper Midwest states it serves – Minnesota, Wisconsin, North Dakota, South Dakota, and Michigan.
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Tesla has announced that it will finally deliver 500 kW charging as it is about to install its long-awaited V4 Supercharger cabinets.
The rollout of Supercharger V4 has been a strange one, to say the least.
Tesla has been deploying the new charging stations for two years and calling them “Supercharger V4”, but it has only been deploying the charging stalls.
Supercharger stations are made of two main parts: the stalls, which are where the charging cable is located, and the cabinets, which are generally located further back and include all the power electronics.
For all these new “Supercharger V4”, Tesla was actually using Supercharger V3 cabinets. This has been limiting the power output of the charging stations to 250 kW – although
Today, Tesla officially announced its “V4 Cabinet”, which the automaker claims will enable of “delivering up to 500kW for cars and 1.2MW for Semi.”
Here are the main features of the V4 Cabinet as per Tesla:
- Faster charging: Supports 400V-1000V vehicle architectures, including 30% faster charging for Cybertruck. S3XY vehicles enjoy 250kW charge rates they already experience on V3 Cabinet — charging up to 200 miles in 15 minutes.
- Faster deployments: V4 Cabinet powers 8 posts, 2X the stalls per cabinet. Lower footprint and complexity = more sites coming online faster.
- Next-generation hardware: Cutting-edge power electronics designed to be the most reliable on the planet, with 3X power density enabling higher throughput with lower costs.
Tesla reports that its first sites with the new V4 Cabinets are going into permitting now. The company expects its first sites to open next year.
We recently reported about Tesla’s new Oasis Supercharger project, which includes larger solar arrays and battery packs to operate the charging station mostly off-grid.
Early in the deployment of the Supercharger network, Tesla promised to add solar arrays and batteries to all Supercharger stations, and Musk even said that most stations would be able to operate off-grid.
While Tesla did add solar and batteries to a few stations, the vast majority of them don’t have their own power system or have only minimal solar canopies.
Back in 2016, I asked Musk about this, and he said that it would now happen as Tesla had the “pieces now in place” with Supercharger V3, Powerpack V2, and SolarCity:
It took about 8 years, but it sounds like the pieces are now getting actually in place with Supercharger V4, Megapacks, and this new Oasis project.
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Hyundai has a new secret weapon it’s about ready to unleash. To revamp the brand in China and counter BYD’s surge, Hyundai is launching a new AI-powered EV next year. The new model will be Hyundai’s first dedicated electric car for the world’s largest EV market.
With the help of Haomo, a Chinese autonomous startup, Hyundai will launch its first EV equipped with generative AI. It will also be its first model designed specifically for China.
A Hyundai Motor official said (via The Korea Herald) the company is “working to load the software” onto the new EV model, “which will be released in the Chinese market next year.” The spokesperson added, “The level of autonomous driving is somewhere between 2 and 2.5.”
In comparison, Tesla’s Autopilot is considered a level 2 advanced driver assistance system (ADAS) on the SAE scale (0 to 5), meaning it offers limited hands-free features.
With Autopilot, you still have to keep your eyes on the road and hands on the steering wheel, or the system will notify you and eventually disengage.
Haomo’s system, DriveGPT, unveiled last spring, takes inspiration from the OpenAI’s popular ChatGPT.
The system can continuously update in real-time to optimize decision-making by absorbing traffic data patterns. According to Haomo, DriveGPT is used in around 20 models as it looks to play a bigger role in China.
Hyundai hopes new AI-powered EV boosts sales in China
Electric vehicle sales continue surging in China. According to Rho Motion, China set another EV sales record last month with 1.2 million units sold, up 50% from October 2023.
Over 8.4 million EVs were sold in China in the first ten months of 2024, a notable 38% increase from last year.
BYD continues to dominate its home market. According to Autovista24, BYD accounted for 32.9% of all PHEV and EV (NEV) sales in China through September, with over half of the top 20 best-selling EV models.
Tesla was second with a 6.5% share of the market, but keep in mind these numbers only include plug-in models (PHEV).
Like most foreign automakers, Hyundai is struggling to keep up with the influx of low-cost electric models in China. Beijing Hyundai’s sales have been slipping since 2017. Through September, Korean automaker’s share of the Chinese market fell to just 1.2%.
Last month, Hyundai opened its first overseas digital R&D center in China to help kick off its return to the region.
According to local reports, Hyundai is partnering with other local tech companies like Thundersoft, a smart cockpit provider, and others in China to power up its next-gen EVs
With its first AI-powered EV launching next year, Hyundai hopes to turn things around in the region quickly. The new model will be one of five to launch in China through 2026.
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