Zeihan Predicts EV Revolution Fails and High Global Inflation for Five Years

Peter Zeihan is a geopolitical forecaster who uses simplified analysis and makes broad generalized predictions.

He has predicted financial doom for China for over a decade. He does correctly identify things like demographic challenges which in some cases can cause a -1% drag on GDP growth for a country. However, he broadly assumes that no national policies or innovation by companies can overcome challenges.

His latest two predictions are that the EV revolution will fail and there will be high global inflation (9-15% per year) for five years.

Zeihan is predicting that copper supply shortages will prevent a transition to electric vehicles.

Zeihan ignores that Tesla and other EV makers are drastically reducing the length of wiring used. the wiring has reduced from 3000 meters to less than 1000 meters with a target of about 100 meters.

Global copper demand from solar and wind energy generation will reach 852,000 tonnes in 2022, while the growing electric vehicle market will account for 1.1 million tonnes this year.

By 2030, analysts at Rystad Energy project that copper demand will outstrip supply by more than 6 million tonnes.

According to the Copper Development Association, a conventional car uses around 18 to 49 pounds of copper, while in battery electric cars usage escalates to 183 pounds; for their part, battery electric buses use 814 pounds.

Chile is the world’s largest copper producer, putting out 5.6 million tonnes of copper in 2021 and with reserves of 200 million tonnes. The value of copper exports in the country jumped more than 40 percent last year, according to Chile’s central bank, with copper shipments reaching US$53.42 billion for the period.

Meanwhile, Peru, the second largest copper producer, accounted for 2.2 million tonnes of global output last year. The Antamina, Cerro Verde and Las Bambas mines are responsible for about half of the country’s copper mine supply.

Copper prices are currently $8045 per tonne.

The global copper market is expected to see a deficit of about 325,000 tonnes in 2022 and a surplus of 155,000 tonnes in 2023, the International Copper Study Group (ICSG) said in October, 2022.

World apparent refined copper usage is expected to increase by about 2.2% in 2022 and 1.4% in 2023, the ICSG said.

“A deterioration in the global economic outlook, mainly as a consequence of elevated energy prices and high inflation has resulted in a downward revision to refined usage growth for both 2022 and 2023,” the Group said.

World refined copper production is forecast to rise by about 2.8% in 2022 and 3.3% in 2023, the ICSG said.

If electric cars are quadrupling from 10 million cars this year to 40 million cars in 2025, then there will be an increase in copper demand by about 4 million tonnes. This will be offset by 1 million tonnes for reduced ICE cars. There is currently a reduction in global economic activity because of high inflation and some level of a global recession.

IF Zeihan were right on his inflation call then there is a long term global recession so there is demand destruction for materials and room for increased demand for things like electric cars.

There would be time for copper production to increase.

51 thoughts on “Zeihan Predicts EV Revolution Fails and High Global Inflation for Five Years”

  1. Yeah…”long term global recession” and “increased demand for electric cars” really don’t belong in the same sentence unless “would almost eliminate” is in between them.

  2. It’s all in the demographics.

    And all governments, academics, and economists worldwide are in complete denial of the scale of the problem as they all bought into this nihilist lie of overpopulation.

    The demographic collapse will be catastrophic. On scale with the collapse of the pagan ancient world and its replace by Christianity.

    I’ve been warning people about this for 30 years.

    Anyone seen the recruiting problems with the DoD lately? It’s not because young people don’t want to serve. It’s because we’ve run out of them.

    That’s why globalism is coming to an end.

    That’s why the US Navy is collapsing.

    And along with it this pointless movement to EV. Because it takes capital to do that and people make capital.

    No people = no tax base = no capital.

  3. Advent of Robotaxis will reduce demand for cars by half if not 80%, at least in the developed world. Other places move by scooters. That volume won’t decline.

    • In order to power all those mandated EV’s by 2030 we would have to build one 60gigwatt nuke plant a month just to power the EV’s never mind the rest of the electric demand. Not to mention totally rewiring the entire country’s power grid to do it. But hey, it’ll be fine…

    • Robotaxis will only become widely used if people are impoverished. Having your own car is always preferable because it provides more freedom of movement and a cleaner, more personalized experience. Of course with the way we are going, widespread impoverishment is seeming more and more likely.

  4. Considering the investment being made in battery research, I can’t see batteries of all sorts not continually improving over the next decade. Other batteries like the aluminum-sulfur-molten salt electrolyte chemistry cell will replace lithium ion for grid scale, behind the meter, and off grid uses freeing up materials like lithium/cobalt/whatever for vehicle batteries.

    As always the practicality of BEVs are solely dependent on the available batteries, simply because all the other needed technologies are mature. Self driving is not needed. I don’t see how BEVs don’t end up dominating, and for that matter strengthening the grid through V2G.

  5. What about the shortage of Lithium? I would be very interested to see a thorough analysis of this. And yes, unfortunately, like any material supply, Copper and Lithium limited supply cannot permit an EV “revolution”.

    • Each mining company must legally list there proven reserves. But they are not required to list there likely reserve or the total amount of X element in the earth. And many people believe proven reserves are the only reserves available. That is a mistake. There is lithium dissolved in sea water. If you factor in the volume of the ocean you will find there is enough lithium in the ocean to replace every car on earth with EV with lithium batteries. Same is true for Copper, phosphate, uranium and many other elements that people say we are running out. Right now 90% of the lithium we use is coming from mines salt deposits on land. not the ocean.

      For copper specifically the ore eposits we use mine are often formed under an ocean that is now gone. In recent years geologist have been searching for ore deposits.and they are finding large high grade deposits of copper, manganese, silver and gold. on the sea floor. And there are companies today designing robotic equipment to extract these resources.

      • How relevant to this discussion is the presence of minerals dissolved in the ocean?

        As far as I know, the only mineral that is extracted from the ocean on a commercial scale is salt. Seawater is put into ponds next to the shore and left there for the water to evaporate over a long period of time, leaving the salt to be collected.

        Are you aware of any other mineral being extracted from the ocean on a commercial scale, or that even has a realistic prospect of being able to be extracted economically on a commercial scale?

    • Lithium is not that scarce; it’s just been kind of a useless element until recently. There was lithium grease, experimental chemistry, mood stabilizers and small scale lithium batteries phones. And then suddenly there were cars with many kWh of storage. Lithium has scaled quickly and it will continue to scale quickly for at least the next decade.

  6. Zeihan describes futures that might happen, providing information on what to avoid. His case for the collapse of globalization (in his book “The End of the World is Just the Beginning”) rests on 1) demographics and 2) the withdrawal of support by the US Navy for worldwide freedom of navigation.

    The demographics seem hard to argue with, and the timing on that will be hard to change. (“Manufacturing human beings” is not very flexible.) His case for age groups serving different economic roles (consuming, building capital, drawing down capital) makes a lot of sense. It’s a great puzzle to think through.

    American withdrawal from supporting global freedom of navigation seems less plausible, however, if the demographics push supply manufacturing into regionalization anyway, then why should the US support China’s trade with Europe or the Middle East? And it seems very true that if ocean container shipping become unreliable, things will fall apart “just in time.” But will American business allow that to happen without a long grace period to re-shore resources and manufacturing back to NAFTA-land?

    At the same time Zeihan does not do himself any favors with hysterical clickbait YouTube titles about the collapse of China, Russia, Twitter, his driveway, etc. I think he’s just impatient.

    • Yea, I have brought this up on youtube vids of his.
      Basically- what is the support the US Navy is winding down its role? So far, the only response has been a decrease in surface combat ships and a more reliance on carrier battle groups…which I don’t think there is?

      • Zeihan specifically claims the US is currently pulling or mostly pulled out of the Persian Gulf region. I think we have pulled out all our big aircraft carriers. We’ve still got other ships in the Gulf, engaging in exercises with UK and Saudis. The US seized a shipment of ‘missile fuel’ from Iraq to Yemen in the Gulf of Oman.

        Also the US is deploying 100 small unmanned vessels to the Persian Gulf, to monitor for potential threats to shipping. While that doesn’t directly project force, it does indicate a possible new mode of monitoring who’s doing what at a level of detail beyond satellite monitoring, and seems to imply an intent to ‘do something’ if someone causes a problem. Perhaps they monitor for signs of mine-laying?

        So far I have to ask “what naval pull back?” I do agree the people of the US are today far less supportive of US military adventures – but in general still quite supportive of the Navy itself. Possibly that will change in the coming recession, in the form of demands to reduce military spending.

        Right now the US administration clearly feels it has little choice but to keep the Navy in the Gulf to prevent further reductions in global energy supplies and the resulting high profits to Russia. Which is probably why the Saudis felt perfectly at ease turning down Biden’s request to increase oil production to help him out pre-midterms.

    • Yes, I’ve watched a lot of his stuff recently.

      Two things, no one is as smart as they think they are.

      He provides some excellent food for thought but cannot be right in all details, especially as he has no way of incorporating large technological changes. For example, radical life extension (or even rejuvenation) could become a serious player in the next, say, 5 to 10 years. This alone would blow every prediction out of the water.

      He said the other day that we are due to run out of diesel fuel in the US in the next 20 days. That will be amazing if that actually turns out to be the case. No food deliveries, no gas deliveries, few buses, no Amazon, and right before Christmas.

      He also said 80% of the world’s neon production, essential for making electronics, was destroyed in western Ukraine. I dunno about that one either. I decided to push up my laptop purchase from next spring and got a very nice one for about a third of the going price, I ordered it on a Friday afternoon by mail (and not even from Amazon) and it showed up on my porch within 24 hours. Hard to believe, even with the current PC slump, that folks would be letting these go so cheaply (even as Black Friday deals) if they were about to be unable to either make them or deliver them.

      The other is that I am not sure all the clickbait titles are his. I think he gets picked up and used in a lot of YouTube vids put up by other people.

      Slight digression: Fight back on silly clickbait titles. I refused to watch one (not one of his) just last week, posting that the title was entirely too silly to be taken seriously. Damned if they didn’t change it to one that is far more accurate–and I watched it and it was a good video.

    • Zeihan predicted in 2014 that the Russians would move to reconquer Eastern Europe, for a combination of demographic and geographical reasons.

      BUT, his prediction was that they would be complete by 2019. And his demographic argument meant that his explanation didn’t work with them trying the decade afterwards.

      So… nice points on the board for identifying a general trend, but some points off for being too overconfident when it comes to details and timing.

      I still follow him, but add some serious error bars to his confident predictions.

  7. “IF Zeihan were right on his inflation call then there is a long term global recession so there is demand destruction for materials and room for increased demand for things like electric cars.”

    Not picking a side on the global recession part but if there is a global recession then people are less likely to buy luxury goods and EVs are most definitely luxury goods. The primary impediment to mass electrification is an economic downturn which causes people to not purchase a $43k Model 3 and instead buy the $26k Civic.

    • 5-year cost of ownership for a $43k model 3 is less than a $26k Civic driven 15-20k miles per year and will have more resale at the end. Depreciation on ICE cars is going to increase.

      • The Civic doesn’t need a new engine in 10 years and the average American drives about 13K per year. Owning a new car for only 5 years is a luxury. Any rational person would like a few years of not having a car payment.

        A new 26K car is also a luxury. The purchase price of all three of the cars I’ve owned totals 27.5K. That and all the gas I bought maybe totals 43K-50K.

        • Most ICE cars are junk in 200k miles. Battery cars have fewer parts and can last 500k+ miles. Replacing the battery pack gets cheaper as the price of batteries drops about 10-15% most years. You are guaranteed to require multiple major maintenances as the ICE car gets up to 100k+ miles.

          • You have to factor in that most people today buy used ICE cars, not new, on account of the huge increase in price AND longevity. In much the same way most home purchases are existing homes. It’s not like the average person actually experiences the price of modern new cars.

            And you can say “only” 200K if you like, but that’s long enough that it’s running up against the “half-life” of cars on account of accidents.

          • The costs of ICE and EV intersect at around 100k miles. If you think battery replacement will be a financial lark then I have bridge to sell you. The head of Ford EV disagrees with your assertions here, btw. Ford sees very clearly that the appetite for subsidized EV’s will end soon and that battery formulations are not going to come to the rescue. They have surveyed metals/minerals availabilities and concluded it is a race to the bottom of the mine. Forget even the lack of grid or the willingness to build it up. The electric utility industry still uses mechanical switching at its substations for crimminy sakes. EV’s are at this point 100% political. This is not a market driven phenomenon. That’s Ford’s bottom line and why they are not going ga-ga for the subsidies carrot that GM is swallowing whole.

            • Ford EV and batteries are more costly. Tesla has over 60% market share in North America and is heading back over 70% again in 2023 when tax credits kick in for them. Tesla batteries cost $13000-14000 to replace. 8 year battery warranty with at least 70% charge retention 100k, 120k, 150k miles over 8 years depending upon model.

              vs ICE $5000/year in gas for 1000 gallons.$3000/year for 600 gallons at $5/gallon. Plus oil changes and other service $400-800 per year.

              EV 150k miles after 8 years. $13000 battery replacement. 10 cent per kwh home charging for 5 miles per kwh. $3000 to charge at home + road charging for some highway trips or other trips. $3000. 100 other charges. $2000 of other service. $21000 or still go with 70-80% range. 210-240 miles of range and do not change battery for another 8 years until it goes to 150 mile range. $6000 of cost at 8 years no battery change.

              ICE 150k miles, 5000 gallons over 8 years. $25000. + $5000 of service. Most ICE cars are beaters after 150k-200k miles and can become more costly to maintain with big $5000-7000 service needed to keep them going.

      • When comparing cost of ownership, it is important to realize that ICE vehicles are driven more than EV’s. Average miles per year for EV’s rarely exceed 10K. The lack of range and the charging time restrict long road trips.

        And, of course your ICE does not need a completely new battery pack at 10 years or 100K miles.

        • There is a very large tesla supper charger network for Teslas. And the software in the car will automatically guid you to the nearest charger. If you go on line you will find many tesla owners actually to use teslas for long drives and do put on more the 15K a year. I took long drove in the watern US and saw a lot of teas out in the middle of nowhere. And if you do google searches you will find a lot of teslas with high odometer readings and long tesla road rtrip reports.

          For other brands you have to preplan your tip to locate the chargers you will need to reach your destination. There are not as many chargers as tesla because the car manufactures didn’t build them like tell did. And often when people arive at the charger it doesn’t work or it is behind a locked gate.

        • I kind of suspect that a lot of the lower EV mileage is more a socioeconomic result of EVs being bought by people who can afford to own multiple vehicles, none of which get used as heavily on average as ICE cars owned by people who can only afford one.

          If we looked solely at ICE cars owned by EV owners, I bet we’d find that those get a lot less miles per year as well.

  8. I’ve heard this story before. First it was nickel that was going to derail the ev revolution. Then everyone was worried about a cobalt shortage. Then LiFePo4 surged in popularity putting those to rest. Then lithium was going to be the limiter. Now copper.

    I’m confident the market will figure it out and these predictions will prove wrong again.

    • The market has already figured it out which is why people drive ICE cars and have to be forced to transition to EV.

  9. Zeihan has interesting perspectives but he seems to overlook the rise of AI and fusion energy (Helion etc) which will change everything.

  10. C-motive electrostatic motors eliminate supply chain concerns over copper and magnets by using PCB stators and rotors immersed in dielectric fluid. Torque increases with voltage. They don’t heat up, can hold a load in fixed position with near zero draw and have 10x torque/kg. They are limited to ~2000rpm but that is ok for many applications and gears could be added to go higher. See c-motive.com

    • Can you provide examples of then being used in production vehicles? Or, heck fixed installations!

      If it’s a “working in the lab” wonder, then expect production use in 5 or more years.

  11. PHEVs require at least three times less battery mass as pure EVs. Plus they can be quickly refueled and have a substantially longer range. Methanol fuel cell PHEVs could also be used as home backup power– perpetually– as long as methanol was supplied.

    Methanol fuel cell PHEVs could use green methanol produced from urban sewage, and agricultural animal waste. Green methanol could also be synthesized from atmospheric CO2 and hydrogen from water using nuclear, solar, wind, and hydroelectricity.

  12. Uncle from Mohawk, Mi. was one of those miners.
    The rock piles from mining provided endless hours of exploration during summer vacations.

    Btw, how much copper in the motor?

  13. LFP batteries require no nickel or cobalt but do still use as much copper. That just doesn’t seem like such a heavy lift for ordinary market forces to supply and Tesla would be on it locking in supply contracts years in advance for it’s anticipated scaling.

      • I dont know what has happened in the US. I know that in Italy before the Euro small change
        was made of steel. This from the time of Fascism, which introduced ACMONITAL, “Italian
        Monetary Steel”. Since I never saw rusted coins, I imagine it was stainless steel, at least after
        1960.

  14. Copper is abundant, very easy to recycle. It’s also quite easy to mine using low tech (bronze age came before iron age) so scaling production is not a big problem.

    • Any idea how long it takes to “scale production”? Opening new mines is a decade long process, and clearing regulatory hurdles plus building new smelting and processing facilites takes nearly a decade… unless done in a third world country where its “OK” to poison the local population. Unless started now, which isn’t happening, production will not be scaling in the time frame being discussed.

    • At 50 ppm, copper (per Wikipedia) is the 25th most common element (by crustal abundance). That’s too low for economical extraction from ordinary crustal rock. There are geological processes that lead to concentrated copper ore deposits, but my understanding is that the accessible high grade deposits have nearly all been found and used up. Mining today uses low grade ores that would once have been considered uneconomic.

      OTOH, copper is one of the easiest elements to recycle, and a large percentage of copper on the market now comes from recycled wiring and processed PCB boards. Old autos used a lot more copper wiring than modern cars require — not counting the motors for EV’s — and scrapped cars are a major source of copper. Likewise demolished buildings.

      If copper becomes too expensive, it’s possible to design high performance electric motors with aluminum coils. There’s a recently developed process for making aluminum wires with embedded graphene. Conductivity remains lower than copper, but it comes close. Motor performance actually depends more on the speed of rotation and the coil switching frequency than it does on conductivity of the coils.

    • Having spent a little bit of time in the mining industry, I can assure you that modern, large scale, copper mining technology is as related to bronze age mining technology about as much as a modern copper-lined anti-tank shaped charge is related to a bronze headed axe.
      Same element, but no other connection at all.

  15. I wonder how much copper prices have to increase to motivate reopening the mines in the Keweenaw Peninsula in northernmost Michigan. They produced unusually pure metallic copper.

    • I actually attended college there.

      There are a couple problems with the copper deposits in the Keweenaw. (Which are far from exhausted.)

      The first is that they’re in metallic form. This makes them really hard to mine with machinery. You try to blow a vein into fragments you can load, it just mushrooms out and stays in one piece. Back in the day men mined it with hammers and chisels!

      The second is that it’s not all that pure, it’s actually heavily alloyed with silver, which has to be separated out electrolytically at considerable expense.

      Most copper mining is suphate ores which are easily open pit mined, and then chemically reduced to pure copper.

      So, plenty of copper there, but not really economical to remove with modern mining techniques.

        • My college education was in computer engineering and human biology; I was planning a career in medical instrumentation. But I never completed those degrees, had to drop out in my senior year for family reasons, and then ended up a mechanical engineer by apprenticeship.

          At this point, of course, I’m approaching retirement.

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