There could be problems with disruption of the supply of batteries for electric vehicles, according to a report by insurance brokers JLT Specialty. Car, truck, bike and van manufacturers could be hit with the supply chain problems.

The JLT Specialty report pointed that eight of the 11 main countries that produce the raw materials for EV batteries, to include lithium and cobalt, are in countries and regions that are designated as ‘high or very high risk of disruption’.

The Democratic Republic of Congo, for example is responsible for 80 per cent of cobalt exports. “Political instability in the country has created uncertainty over the investment environment for new operations, and the prospect of political interference also looms large – especially in light of a new mining code agreed last month which will double the DRC government’s stake in mining projects,” said JLT.

The Philippines are prone to natural disasters, yet the island nation is a prime global source of nickel, that is part of the electrodes in the batteries. Earthquakes, typhoons and landslides or flooding can hamper the supply chain there.

Prices of raw materials for EV batteries have also spiralled – with copper up 39 per cent and cobalt up 127 per cent over the last year according to research from Business Monitor International.

The JLT Specialty statement concluded, “The overwhelming reliance on raw materials from high risk regions for EV battery production represents a major threat of disruption to supply and poses a business-critical risk to manufacturers,” said Matt Grimwade, head of automotive at JLT Specialty. “The risk is real and growing, and it is imperative that auto makers take the necessary steps to mitigate and protect from a potential supply chain catastrophe.”