“The transition to clean energy is happening worldwide and it’s unstoppable,” articulated Fatih Birol, the International Energy Agency’s executive director recently. The IEA had projected that nearly half of the world’s electricity supply will come from renewable energy by 2030, driven by wind turbines, solar panels, and electric vehicles (EV) that are critically dependent on soaring copper-rich infrastructure.
It all seems to be coming true. In 2024 the IEA reported more than 17 million sales of new EVs, a 25% jump over 2023, with China accounting for two-thirds or 11 million of total sales, Europe with 3.2 million, US with 1.5 million and the rest of the world contributing 1.3 million.
However, expecting similar EVs growth sales in 2025 may seem overly optimistic. When passed, the Trump administration’s new “Big Beautiful Bill” will significantly slow down the growth of electric vehicles (EVs) in the US, by rolling back federal support and incentives for EV adoption by eliminating the $7,500 Federal tax credits for new EVs and $ 4,000 for used ones.
Removal of such financial incentives will make EVs more expensive for consumers and prevent its market expansion. Hence, US automakers may defer making further investments in EV projects, at least in the near future. However, such postponement may be limited to the US or a few countries alone.
No rolling back on EVs:
The advancements in EV technologies, charging infrastructure and batteries, especially in China and many European and Asian countries, will not be easy to roll back. Moreover, the promise of meeting their net-zero goals at different UN Conference of Parties through the electrification of the transportation system will ensure that these countries will continue the path of decarbonisation. And copper’s superior characteristics like superior electrical conductivity, durability, malleability, reliability, makes it the backbone of renewable energy systems.
Hence, the EV sector is expected to see a compound annual growth rate (CAGR) of 14.3% in copper consumption through 2034, outpacing other energy transition sectors such as solar and wind. The reason: EVs use copper in electric motors, batteries, inverters, and wiring because of its durability, malleability, reliability and superior electrical conductivity.
Copper windings are critical for electric motors as it ensures efficient power delivery and minimal energy loss because of the metal’s superior conductivity. Others are shifting towards copper rotor induction motors, which are more reliable and sustainable than alternatives, because they don’t use rare earth elements.
Copper is also integral to EV inverters, which convert the battery’s DC power to AC for the motor, as well as in various power electronics used throughout the vehicle. Copper is also important in wiring for power distribution, control systems, and data transmission. A fully electric vehicle can contain up to a mile of copper wiring, supporting everything from propulsion to infotainment and safety systems.
Not forgetting one of the strategic components for EV growth is the back-end electricity distribution and supply to point of demand which will increase grid demand drive higher utilization of transformers and copper wire, leading to a boom in their respective markets. This is because transformers are essential for voltage regulation in the T&D of electricity, and copper is the primary material used in their windings due to its high conductivity.
As electricity demand rises, more transformers will be needed to handle the increased flow of power, and the copper within them will be in higher demand. This shall also create an upgrading of the ageing transformers considering the new rise in High Tension demand for fast or higher capacity chargers.
In the cause of charging stations:
This valuable material has also become an indispensable component of electric vehicle charging station—the critical infrastructure for EV acceptance. According to the International Copper Association, the world will require five million charging ports within the next decade. Hence, greater demand for copper.
Then its use as a key material in lithium-ion batteries, acting as current collectors and in busbars and foils. Its ability to withstand repeated charging and discharging cycles without degrading is crucial for battery longevity and performance.
Today India, is on the cusp of an EV revolution driven by favourable government policies like the production-linked incentives (PLI) scheme, subsidies to manufacturers and consumers, but requires easy accessibility to copper at competitive rates. Yet, India’s import dependency on raw copper ores, concentrates and copper products continues to rise. In FY 2024.
With its trade partners in copper and its products, India had a trade deficit of $ 6.8 billion. Imports for copper and its products have increased by 21% (in value terms) in FY 2024. India imported raw copper ores and concentrates worth $3.3 billion (Rs 27,374 crore), a 22% growth in value terms from FY 2022. The value of raw copper ore and concentrates is higher than the import of lithium, manganese, nickel, and silicon combined.
Given the rising demand and global supply shortage expected both in the near term (2024) and long term (beyond 2030), India needs to prepare a detailed action plan for sourcing as a part of its overall copper strategy to ensure that the rising copper demand in the country, incentivizing the domestic copper smelting, refining, and fabrication industry through capital or production-linked incentives will attract further investment and new players in this sector.
Moreover, reopening of closed copper smelter plants like the 40 lakh Vedanta’s Sterlite Copper Plant in Tamil Nadu, could be a great beginning effecting the overall growth of the sectors.
Ashhok Kapoor is Founder & MD of EzUrja Pvt. Ltd. | Advisor to multiple social and sustainability ventures. Views expressed are the author’s personal.