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2023-04-18
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Global Supply Chains

of EV Batteries

The IEA examines the full spectrum of

energy issues including oil, gas and

coal supply and demand, renewable

energy technologies, electricity

markets, energy efficiency, access to

energy, demand side management

and much more. Through its work, the

IEA advocates policies that will

enhance the reliability, affordability

and sustainability of energy in its 31

member countries, 10 association

countries and beyond.

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International Energy Agency

Website: www.iea.org

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Global supply chains of EV batteries

Executive Summary

Executive summary

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GlobalSupplyChainsofEVBatteriesTheIEAexaminesthefullspectrumofenergyissuesincludingoil,gasandcoalsupplyanddemand,renewableenergytechnologies,electricitymarkets,energyefficiency,accesstoenergy,demandsidemanagementandmuchmore.Throughitswork,theIEAadvocatespoliciesthatwillenhancethereliability,affordabilityandsustainabilityofenergyinits31membercountries,10associationcountriesandbeyond.Pleasenotethatthispublicationissubjecttospecificrestrictionsthatlimititsuseanddistribution.Thetermsandconditionsareavailableonlineatwww.iea.org/t&c/Thispublicationandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Source:IEA.Allrightsreserved.InternationalEnergyAgencyWebsite:www.iea.orgIEAmembercountries:AustraliaAustriaBelgiumCanadaCzechRepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLithuaniaLuxembourgMexicoNetherlandsNewZealandNorwayPolandPortugalSlovakRepublicINTERNATIONALENERGYAGENCYSpainSwedenSwitzerlandRepublicofTürkiyeUnitedKingdomUnitedStatesIEAassociationcountries:ArgentinaBrazilChinaEgyptIndiaIndonesiaMoroccoSingaporeSouthAfricaThailandGlobalsupplychainsofEVbatteriesExecutiveSummaryExecutivesummaryGlobalsupplychainsofEVbatteriesPAGE2ExecutiveSummaryAselectriccarsalescontinuetobreakrecords,supplychainconsiderationsmovetotheforeBatteriestypicallyaccountsfor30%to40%ofthevalueofanelectricvehicles(EV),andtheracetonetzerowillfocusattentiononthesecurityofsupplyofthecriticalmineralsandmetalsneededtomanufacturethem.Electriccarsalescontinuedtobreakrecordsin2021,testingtheresilienceofbatterysupplychainsFewareasintheworldofcleanenergyareasdynamicasEVmarkets.In2021,EVsalesbrokenewrecords,withnearly10%ofglobalcarsalesbeingelectric,fourtimestheirmarketsharein2019.PublicandprivatespendingonEVsdoubledrelativeto2020.MoreandmorecountrieshavepledgedtophaseoutICEsorhaveambitiouselectrificationtargets.FivetimesmoreEVmodelswereavailablein2021relativeto2015,andmostmajorcarmakersareannouncingplanstofurtheraccelerateelectrificationoftheirfleets.ChinaaccountedforhalfofthegrowthoftheEVmarketin2021.MorevehiclesweresoldinChinain2021(3.3million)thanintheentireworldin2020.SalesinEuropecontinuedtogrowrobustly(up65%to2.3million)afterthe2020boom,andtheyincreasedintheUnitedStatesaswell(to630000)aftertwoyearsofdecline.Thefirstquarterof2022showedsimilarsalestrends.Today’sbatteryandmineralssupplychainsrevolvearoundChinaChinaproducesthree-quartersofalllithium-ionbatteriesandishometo70%ofproductioncapacityforcathodesand85%foranodes(botharekeycomponentsofbatteries).Overhalfoflithium,cobaltandgraphiteprocessingandrefiningcapacityislocatedinChina.Europeisresponsibleforoverone-quarterofglobalEVassembly,butitishometoverylittleofthesupplychainapartfromcobaltprocessingat20%.TheUnitedStateshasanevensmallerroleintheglobalEVbatterysupplychain,withonly10%ofEVproductionand7%ofbatteryproductioncapacity.KoreaandJapanhaveconsiderablesharesofthesupplychaindownstreamofrawmaterialprocessing,particularlyinthehighlytechnicalproductionofcathodeandanodematerial.Koreaisresponsiblefor15%ofglobalcathodematerialproductioncapacity,whileJapanaccountsfor14%ofcathodeand11%ofanodematerialproduction.KoreanandJapanesecompaniesarealsoinvolvedintheproductionofotherbatterycomponentssuchasseparators.Mostkeymineralsareminedinresource-richcountriessuchasAustralia,ChileandtheDemocraticRepublicofCongo,andhandledbyafewmajorcompanies.GovernmentsinEuropeandtheUnitedStateshaveboldpublicsectorinitiativestodevelopdomesticbatterysupplychains,butthemajorityofthesupplychainislikelytoremainGlobalsupplychainsofEVbatteriesPAGE3ExecutiveSummaryChinesethrough2030.Forexample,70%ofbatteryproductioncapacityannouncedfortheperiodto2030isinChina.Batteryandmineralssupplychainswillhavetoexpandten-foldtomeetgovernmentEVambitionsTherapidincreaseinEVsalesduringthepandemictestedtheresilienceofbatterysupplychains,andRussia’swarinUkrainehasfurtherexacerbatedmatterswithpricesofrawmaterialssuchascobalt,lithiumandnickelsurging.InMay2022,lithiumpricesweremorethanseventimeshigherthaninearly2021duetounprecedentedbatterydemandandalackofsufficientinvestmentinnewsupplycapacity.Meanwhile,Russiasupplies20%ofglobalhigh-puritynickel.Averagebatterypricesfellby6%toUSD132perkilowatt-hourin2021,aslowerdeclinethanthe13%dropthepreviousyear.Ifmetalpricesin2022remainashighasinthefirstquarter,batterypackswouldbecome15%moreexpensivethantheywerein2021,allelsebeingequal.However,therelativecompetitivenessofEVsremainsunaffectedgiventhecurrentoilpriceenvironment.Pressureonthesupplyofcriticalmaterialswillcontinuetomountasroadtransportelectrificationexpandstomeetnetzeroambitions.DemandforEVbatterieswillincreasefromaround340GWhtoday,toover3500GWhby2030intheAnnouncedPledgesScenario(APS).Cellcomponentsandtheirsupplywillalsohavetoexpandbythesameamount.Additionalinvestmentsareneededintheshort-term,particularlyinmining,whereleadtimesaremuchlongerthanforotherpartsofthesupplychain–insomecasesrequiringmorethanadecadefrominitialfeasibilitystudiestoproduction,andthenseveralmoreyearstoreachnominalproductioncapacity.Projectedmineralsupplyuntiltheendofthe2020sisinlinewiththedemandforEVbatteriesintheStatedPoliciesScenario(STEPS).Butthesupplyofsomemineralssuchaslithiumwouldneedtorisebyuptoone-thirdby2030tosatisfythepledgesandannouncementsforEVbateriesintheAPS.Forexample,demandforlithium–thecommoditywiththelargestprojecteddemand-supplygap–isprojectedtoincreasesixfoldto500kilotonnesby2030intheAPS,requiringtheequivalentof50newaverage-sizedmines.Thereareothervariablesaffectingdemandforminerals.Ifcurrenthighcommoditypricesendure,cathodechemistriescouldshifttowardslessmineral-intensiveoptions.Forexample,lithiumironphosphatecathodechemistry(LFP)doesnotrequirenickelnorcobalt,butcomeswithalowerenergydensityandisthereforebettersuitedforshorter-rangevehicles.LFPshareofglobalEVbatterysupplyhasmorethandoubledsince2020becauseofhighmineralpricesandtechnologyinnovation,primarilydrivenbyanincreasinguptakeinChina.Innovationinnewchemistries,suchasmanganese-richcathodesorevensodium-ion,couldfurtherreducepressureonmining.Recyclingcanalsoreducedemandforminerals.Althoughtheimpactbetweennowand2030islikelytobesmall,recycling’scontributiontomoderatingmineraldemandiscriticalafter2030.IntheNetZeroEmissionsby2050Scenario(NZE),demandgrowsGlobalsupplychainsofEVbatteriesPAGE4ExecutiveSummaryevenfaster,requiringadditionaldemand-sidemeasuresandtechnologyinnovation.Today’scorporateandconsumerpreferrenceforlargecarmodelssuchassportsutilityvehicles(SUVs),whichaccountforhalfofallelectricmodelsavailablegloballyandrequirelargerbatteriestotravelthesamedistances,isexertingadditionalpressure.Ensuringsecure,resilientandsustainableEVsupplychainswillbekeytoacceleratingglobaluptakeElectrifyingroadtransportrequiresawiderangeofrawmaterials.Whileallstagesofthesupplychainmustscaleup,extractionandprocessingareparticularlycriticalduetolongleadtimes.Governmentsmustleverageprivateinvestmentinsustainableminingandensureclearandrapidpermittingprocedurestoavoidpotentialsupplybottlenecks.Innovationandalternativechemistriesthatrequiresmallerquantitiesofcriticalminerals,aswellasextensivebatteryrecycling,caneasedemandpressureandavoidbottlenecks.Incentivisingbattery“rightsizing”andtheadoptionofsmallercarscanalsodecreasedemandforcriticalmetals.Governmentsshouldstrengthencooperationbetweenproducerandconsumercountriestofacilitateinvestment,promoteenvironmentallyandsociallysustainablepractices,andencourageknowledgesharing.GovernmentsshouldensuretraceabilityofkeyEVcomponentsandmonitorprogressofambitiousenvironmentalandsocialdevelopmentgoalsateverystageofbatteryandEVsupplychains.GlobalsupplychainsofEVbatteriesPAGE5ExecutiveSummaryChinadominatestheentiredownstreamEVbatterysupplychainGeographicaldistributionoftheglobalEVbatterysupplychainIEA.Allrightsreserved.Notes:Li=lithium;Ni=nickel;Co=cobalt;Gr=graphite;DRC=DemocraticRepublicofCongo.Geographicalbreakdownreferstothecountrywheretheproductionoccurs.Miningisbasedonproductiondata.Materialprocessingisbasedonrefiningproductioncapacitydata.Cellcomponentproductionisbasedoncathodeandanodematerialproductioncapacitydata.Batterycellproductionisbasedonbatterycellproductioncapacitydata.EVproductionisbasedonEVproductiondata.AlthoughIndonesiaproducesaround40%oftotalnickel,littleofthisiscurrentlyusedintheEVbatterysupplychain.ThelargestClass1battery-gradenickelproducersareRussia,CanadaandAustralia.Sources:IEAanalysisbasedon:EVVolumes;USGeologicalSurvey(2022);BenchmarkMineralIntelligence;BloombergNEF.ChinaEuropeUnitedStatesJapanKoreaDRCAustraliaIndonesiaRussiaOtherBatteryproductionBatterycellsCathodeAnodeCellcomponents0%25%50%75%100%LiNiCoGrMiningLiNiCoGrMaterialprocessingEVproductionEVsGlobalsupplychainsofEVbatteriesPAGE6EVbatteriesandsupplychainsBatterymetalpricesincreaseddramaticallyinearly2022,posingasignificantchallengetotheEVindustryBatterymetalsprices,2015–July2022IEA.Allrightsreserved.Sources:IEAanalysisbasedonS&PGlobalNotes:LithiumpricesarefromJune2022.CobaltandNickelfromJuly202201020304050607080901000100200300400500600700800900100020152016201720182019202020212022Batteryprice(indexed2015=100)Metalprice(Indexedvalues30Jun2015=100)LithiumCobaltNickelBatteryGlobalsupplychainsofEVbatteriesPAGE7EVbatteriesandsupplychainsEVbatteriesandsupplychainsGlobalsupplychainsofEVbatteriesPAGE8EVbatteriesandsupplychainsRecentdevelopmentsinbatteriesandcriticalmaterialsGlobalsupplychainsofEVbatteriesPAGE9EVbatteriesandsupplychainsGlobalbatterydemanddoubledin2021,drivenbyelectriccarsalesinChinaBatterydemandbymode,2015-2021Batterydemandbyregion,2015-2021IEA.Allrightsreserved.Notes:GWh=gigawatt-hours;PLDVs=passengerlight-dutyvehicles;otherincludesmedium-andheavy-dutytrucksandtwo/three-wheelers.Thisanalysisdoesnotincludeconventionalhybridvehicles.Sources:IEAanalysisbasedonEVVolumes.0501001502002503003502015201620172018201920202021GWhperyearPLDVsBusOther0501001502002503003502015201620172018201920202021GWhperyearChinaEuropeUnitedStatesOtherGlobalsupplychainsofEVbatteriesPAGE10EVbatteriesandsupplychainsHigh-nickelcathodebatterychemistriesremaindominantthoughlithiumironphosphateismakingacomebackMineralcompositionofdifferentbatterycathodesLDVEVcathodesalesshare,2017-2021IEA.Allrightsreserved.Notes:LDV=light-dutyvehicle;LFP=lithiumironphosphate;NMC=lithiumnickelmanganesecobaltoxide;NCA=lithiumnickelcobaltaluminiumoxide.Low-nickelincludes:NMC333.High-nickelincludes:NMC532,NMC622,NMC721,NMC811,NCAandNMCA.Cathodesalesshareisbasedoncapacity.Sources:IEAanalysisbasedonEVVolumes.0%10%20%30%40%50%60%70%80%90%100%NMC333NMC811NCA85LFPMineralcontent(%)LithiumNickelCobaltManganeseAluminiumIronandphosphorous0%10%20%30%40%50%60%70%80%90%100%20172018201920202021Batterycapacityshare(%)Low-nickelHigh-nickelLFPOtherGlobalsupplychainsofEVbatteriesPAGE11EVbatteriesandsupplychainsBatterydemandforEVsdoubledin2021Automotivelithium-ion(Li-ion)batterydemandwas340gigawatt-hours(GWh)in2021,morethantwicethelevelof2020.Thisincreaseisdrivenbytheincreaseinelectricpassengercars(registrationsincreasedby120%).Theaveragebatterycapacityofbatteryelectricvehicles(BEVs)was55kilowatt-hours(kWh)in2021,downfrom56kWhin2020,whereastheaveragecapacityincreasedforplug-inhybridelectricvehiclesto14kWhin2021,upfrom13kWhin2020.Batterydemandforothertransportmodes,includingmedium-andheavy-dutytrucksandtwo/three-wheelers,increasedby65%.AveragebatterycapacitiesforBEVlight-dutyvehicleschangedregionally,withincreasesofmorethan10%occurringinKoreaandseveralEuropeancountries.1Chinaexperiencedunprecedentedgrowthandaccountedforthelargestshareofautomotivebatterydemand,withalmost200GWhofbatterydemandin2021,up140%from2020.GrowthwasalsoimpressiveintheUnitedStateswheredemandmorethandoubledin2021,albeitfromalowerbase.Europe’sdemandgrowthwasslightlylowerthanlastyear,yetitstillincreasedmorethan70%.Thesurgeinbatterydemandwasmetin2021duetosufficientbatteryfactorycapacity.Thenameplatecapacityofafactoryistheintendedfull-loadsustainedoutputofafacility.Calculatedastotaldemandof1ThisreportisanexcerptfromtheGlobalElectricVehicleOutlook2022EVs,consumerelectronics,andstationarystoragebatteriesoverthenameplatecapacitiesofallbatteryplants,theglobalaverageutilisationrateforbatteryfactorieswas43%ofnameplatecapacityin2021,upfrom33%in2020.Thelowglobalaverageutilisationrateisexplainedbytwoprimaryfactors.First,therewasstrategicearlyinvestmentinbatteryplantcapacitytoprepareforprojecteddemandgrowth.Second,somefactoriesarestillrampingupproductioncapacitytoreachnameplatecapacity,aprocessthatcantakefromthreetosixyears.Nickel-basedbatterychemistriesremaindominantAkeydefiningfeatureofbatteriesistheircathodechemistry,whichdeterminesboththebatteryperformanceanditsmaterialdemand.Fortheautomotivesector,threebroadcategoriesofcathodechemistryaremostrelevanttoday:lithiumnickelmanganesecobaltoxide(NMC);lithiumnickelcobaltaluminiumoxide(NCA);andlithiumironphosphate(LFP).NMCandNCAcathodeshavebecomeincreasinglydominantastheyofferhighenergydensitybasedonhighernickelcontentinthecathode.Highernickelcontent,however,requiresmorecomplexandcontrolledproductionprocesses.LFPisalowercostandmorestablechemistry,withlowerriskofcatchingfireandalongercyclelife.Ittypicallyonlyhas65-75%oftheenergyGlobalsupplychainsofEVbatteriesPAGE12EVbatteriesandsupplychainsdensitycomparedwithahigh-nickelNMCsuchasNMC811,althoughrecenttechnologyinnovationshavesignificantlyimprovedtheirenergydensity.NCAisusedexclusivelybyTesla.Nickel-basedchemistries,suchasNMCandNCA,weredominantintheelectriccarbatterymarketin2021with75%ofcathodematerialdemandshareduetotheiradvantagesfordrivingrange.However,therehasbeenamajorresurgenceofLFPoverthelasttwoyears,reachinganEVcathodematerialdemandshareof25%,mainlydrivenbytheincreaseduptakeofelectriccarsinChina.LFPisstillusedformostmedium-andheavy-dutyvehicleapplicationsduetoitssuperiorcyclelife,whichsuitsintensiveusageandfrequentcharging,andthefactthatmostelectricmedium-andheavy-dutyvehiclesareinChina,whereLFPismainlyused.ThecostadvantagesforLFPinChinabecamemoreapparentrecentlyassubsidiesthatfavouredhigh-nickelchemistrieswerephasedout.Cathodeandanodedemandsurgedalongsidebatterydemandin2021.Demandforcathodematerialreached520kilotonnes(kt),morethandoublingfrom2020.Demandforanodematerialalsodoubledtoreach300kt.Thesignificantlyhighermaterialrequirementforcathodematerialisduetothemuchhigherenergydensitiesofthegraphiteanodesincomparisontoleadingcathodes,thusrequiringlessanodematerialpercell.BatterycathodeandanodematerialdemandIEA.Allrightsreserved.Notes:kt=kilotonnes;LFP=lithiumironphosphate.Nickel-basedcathodeincludes:lithiumnickelmanganesecobaltoxideNMC333,NMC532,NMC622,NMC721,NMC811;lithiumnickelcobaltaluminiumoxide(NCA)andlithiumnickelmanganesecobaltaluminiumoxide(NMCA).Sources:IEAanalysisbasedonEVVolumes.025050020172018201920202021ktAnodeOthercathodeNickel-basedcathodeLFPcathodeGlobalsupplychainsofEVbatteriesPAGE13EVbatteriesandsupplychainsResurgenceofLFPNickel-basedchemistriesretaineddominanceofthemarketin2021with85%ofEVbatterydemand.However,therehasbeenamajorresurgenceofLFPbatterychemistriesoverthelasttwoyearswith15%ofEVbatterydemandin2021,doublingfrom7%in2020,primarilydrivenbyincreasinguptakeofLFPinelectriccarsinChina.LFPdemandshareinLDVsinChinamorethandoubledfrom11%in2020to25%in2021,despitethelowerenergydensityofLFPthanhigh-nickelchemistries.Givenhighbatterymetalprices,LFPhasbecomemoreattractiveasitcontainsnocobaltornickel,insteadusinglowcostironandphosphorous(thoughremainingexposedtorisinglithiumprices).LFPreliesonlithiumcarbonateratherthanhydroxideusedfornickel-richchemistries.ThecostadvantagesofLFPinahighcommoditypricemarketareonereasonfortheresurgence.Anotheristherecentinnovationofcell-to-pack(CTP)technology,eliminatingtheneedformodulestohousecellsinthebatterypack,therebyreducingthedeadweightinthepackandimprovingtheenergydensityofLFPbatteries.CTPtechnologywaspioneeredbyBYDwiththeBladebatteryanditcontinuestobeimproved.CATLreleasedtheirthird-generationCTPbatteryincreasingtheLFPpackenergydensitytoaround85%ofaconventionalNMC811battery.CTPisalsobeingappliedtohigh-nickelchemistriestofurtherimprovetheirenergydensity.LFPproductionismostlylimitedtoChina–thetraditionalmainhubfortheLFPbatterychemistry.OnereasonforthisisLFPpatents;theresearchconsortiumowningthepatentsformedanagreementwithbatterymakersinChinainwhichtheywouldnotbechargedalicencefeeforusingLFPifonlyusedinChina.Thesepatentsandlicencefeesaresettoexpirein2022makingproductionandsalesabroadmoreattractive.AnotherkeyreasonistheearlysubsidiesintheLFPsupplychaininChina.LFPisnowsettosurgeglobally.Recently,majornon-ChineseEVmanufacturers,suchasTeslaandVolkswagen,announcedmovestoLFPchemistriesforentry-levelhighvolumeEVmodels.AlmosthalfofallTeslaEVsproducedinthefirst-quarterof2022usedLFP.LFPbatteryproductionisnowplannedinEuropeandtheUnitedStatestomeetanticipatedLFPdemandforEVsintheseregions.AsurgeinLFPposesachallengeforbatteryrecyclingasitisdifficulttomakeaprofitrecoveringironandphosphorous.Withoutvaluablemetalssuchasnickelandcobalt,thevaluethatcanberecoveredfromLFPbatteriesdropsconsiderablyfromconventionalrecyclingmethodsanditseconomicviabilityisaconcern.LFPappearstorequiredirectrecyclingtobeprofitableorwillrequireregulatoryintervention,frameworksoralternativebusinessmodels.–GlobalsupplychainsofEVbatteriesPAGE14EVbatteriesandsupplychainsBatterymetalpricesincreaseddramaticallyinearly2022,posingasignificantchallengetotheEVindustryBatterymetalsprices,2015–July2022IEA.Allrightsreserved.Notes:LithiumpricesarefromJune2022.CobaltandNickelfromJuly2022Sources:IEAanalysisbasedonS&PGlobal.01020304050607080901000100200300400500600700800900100020152016201720182019202020212022Batteryprice(indexed2015=100)Metalprice(Indexedvalues30Jun2015=100)LithiumCobaltNickelBatteryGlobalsupplychainsofEVbatteriesPAGE15EVbatteriesandsupplychainsSignificantbatterymetalpriceincreasesin2022reflectconcernsoftighteningsupplyandunderinvestmentHighbatterydemandhasspurredsignificantincreasesindemandforkeymetalsusedintheirproduction.Betweenthestartof2021andMay2022lithiumpricesincreasedmorethansevenfoldandcobaltpricesmorethandoubled.Nickelpricesalmostdoubledoverthesameperiodreachinglevelsnotseenforalmostadecade.Theunprecedentedbatterymetalpriceriseshavebeencausedbyacombinationofsurgingbatterydemand,increasingpressureonsupplychainsandconcernsaroundtighteningsupply.Thesupplyconstraintshavebeendrivenbythreetrends:first,productionchallengescausedbythepandemic;second,concernsaroundClass1nickelsupplyfromRussia;andthird,structuralunderinvestmentinnewsupplycapacityduringthethreeyearspreceding2021whenmetalpriceswerelow.Someproducersdelayedorevencurtailedplannedprojectsandexpansionsduetolowlithiumprices.Forexample,theAustralianminingcompanyGalaxyResourcesreducedlithiummineproductionatitsmostimportantminebyabout40%in2019asdidotherAustralianlithiumminingcompanies.Thelasttimetherewasapricesurgeinbatterymetalpriceswasforlithiumandcobaltin2017duetooptimisticexpectationsforgrowthinbatterydemand,beforepricescollapsedin2018.Lithiumhasreachedunprecedentedpricelevelstodaybeingalmost200%higherthanitspreviouspeak.Cobaltpricesarealsoupsharplyinrecentmonths,althoughtheyarenotyetatatthelevelexperiencedatitspeak.Thislikelyreflectslowerdemandexpectationsduetolowcobaltchemistriesgainingbatterymarketshare.Supplyissues,suchasdisruptionsinportoperationsinSouthAfricacausedbythepandemicandcivilunrestalsocontributedtothecobaltpriceincreases.Quarterlydrillingactivitybycommoditytype,2020-2021IEA.Allrightsreserved.Sources:IEAanalysisbasedonS&PGlobal.InMarch2022thepriceofnickelreachedrecordlevelsandexperiencedhighlyvolatilemovement,causingtheLondonMetalExchangetotemporarilyclosetradeforthecommodity.Thiswasprimarilydrivenbyashortsqueezebymarketplayers,butrecent0102030405060Q1Q2Q3Q4Q1Q2Q3Q420202021NumberofdrillsCobaltGraphiteLithiumNickelGlobalsupplychainsofEVbatteriesPAGE16EVbatteriesandsupplychainsconcernsaboutthesupplyofnickelfromRussiaduetoitsinvasionofUkrainehasalsofuelledpricerises.Russiaistheworld’slargestproducerofbattery-grade(Class1)nickel.Priceincreasesareusuallyfollowedbyexpansioninsupplywithnewminesorlifeextensionofexistingones.Drillingactivityisanindicatorofexplorationintheminingsector.Sincebatterymetalcommoditypriceshavebeguntorise,sohavedrillcounts(from2020to2021,+50%fornickelandathreefoldincreaseforlithium).Highpricesmaythereforebealong-termbenefitforfuturebatterymetalssupply,stimulatingsignificantsupplyinvestmenttocompensatefortheunderinvestmentduringtheyearsoflowcommodityprices.BatterieshaveyettoexperiencethefullimpactofcommoditypricesurgesDespitetherecentcommoditypricesurge,batterypricesstilldeclinedin2021withBNEF’sannualbatterypricesurveyrecordingasales-weightedaveragepriceofUSD132/kWh,a6%decreasefrom2020.Althoughthisrepresentsasignificantreductionfromthe13%decreasefrom2019to2020,thereareseveralfactorsthatpartiallyinsulatedtheaveragebatterypricefromthecommoditypriceriseslastyear.First,therisingpricesincentivisedchemistrysubstitutions.Manyautomakersswitchedtolowercostcathodechemistrieswithlesscommoditypriceexposure,suchasLFP,whichsawasignificantincreaseinadoption,overnickel-richchemistries.Second,commoditypriceswererelativelylowforthefirsthalfof2021whichhelpedtheaveragepricedecline.Third,theuseofhighernickelchemistriessuchasNMC811reducedtheuseofcobalt,themostexpensivemetalconstituentinbatteriesperkilogramme(kg)(cobaltisaround5%ofNMC811cellpricebasedon2021averageprice),alsooffsettingsomecosts,particularlyinthefirsthalfof2021.However,akeyreasonistheimpactofrisingcommoditypriceshasyettofullymaterialise.Automakersincreasinglyusecontractsinwhichmaterialcostsarelinkedwithcommoditypricesforhighvolumebatteryorders,though,thereisatimelag.Therefore,theseautomakersdidnotfeeltheresultoftheexceptionalcommoditypricerisesfromthelastthreemonthsof2021untilthefirst-quarterof2022.Ifmetalpricesweretoremainatlevelsexperiencedinthefirstthreemonthsof2022throughouttherestoftheyear,thenweestimatethatbatterypackpricesmightincreasebyupto15%fromthe2021weightedaverageprice,allelsebeingequal.TheimpactislikelytobemitigatedbyOEMssubstitutingothermorecost-effectivechemistries,butthesepriceincreasesnonethelesswillposemajorchallengesforautomakers,increasingbatterycosts,decreasingmanufacturermarginsandraisingcostsforconsumers.GlobalsupplychainsofEVbatteriesPAGE17EVbatteriesandsupplychainsEVbatteriesarethemaindemanddriverforlithiumdemand,buttheirimportanceisalsorapidlyrisingforcobaltandnickelBatterymetalsdemand,2017-2021IEA.AllrightsreservedNotes:Class1nickel(>99.8%)issuitableforuseinbatteriesandClass2nickel(<99.8%)isnotapplicableforuseinbatterieswithoutsignificantfurtherprocessing.Otherbatteriesincludes:batteriesforstationarystorageandconsumerelectronics.Sources:IEAanalysisbasedonEVVolumesandS&PGlobal.010203040506070809020172018201920202021ktLiLithiumEVdemandOtherbatteriesCeramicsandglassOther02040608010012014016018020172018201920202021ktCoCobaltMetals05001000150020002500300020172018201920202021ktNiNickelClass2demandClass1non-EVdemandGlobalsupplychainsofEVbatteriesPAGE18EVbatteriesandsupplychainsCriticalmetaldemandandpricesareincreasinglydrivenbybatteriesThethreemostcriticalmetalsforLi-ionbatteriesarelithium,cobaltandnickel.Allthreemetalsareabundantintheearth’scrust,however,supplydependsonmineproductioncapacity.Theexceptionalriseindemandforbatteriesisnowoutstrippingsupply,withnewminesnotbeingbuiltfastenough.LithiumLithiumdemandhasalmostdoubledsince2017to80ktin2021,ofwhichdemandforEVbatteriesaccountsfor47%,upfrom36%in2020andonly20%in2017.Lithiumisalsousedintheproductionofceramics,glassandlubricants.Batteriesarenowthedominantdriverofdemandforlithiumandthereforesettheprice.TheavailabilityoflithiumsupplyisofparticularconcernbecauseitisirreplaceableforLi-ionbatteriesandtherearenocommercialalternativebatterychemistriesavailableatscaletodaythatmeettheperformanceofLi-ionbatteries.Alternativelithium-freechemistries,however,aremakingprogress,forinstance,withNa-ionbeingcommerciallyintroducedbyCATLin2021.CobaltCobaltdemandwas170ktin2021,ofwhichtheEVbatterysharewas24%,upfrom18%in2020.Cobaltisalsousedinsuperalloys,hardmetalsandcatalysts.ThecobaltintensityofLi-ionbatterieshasdecreasedsignificantlyoverrecentyearsasbatterymakersmovedtohighernickelcontentchemistriestoachievehigherenergydensitiesandlowercosts(cobaltisthemostexpensiveconstituentperkgofLi-ionbatterymetal).TheadditionalconcernsofhumanrightsabusesandchildlabourrelatedtocobaltminingintheDemocraticRepublicofCongo(DRC)havealsomotivatedbatterymakerstomoveawayfromcobalt-intensivechemistries.NickelNickeldemandisdominatedbystainlesssteelproduction.Totaldemandwas2640ktin2021,ofwhichtheshareofEV-relateddemandwas7%,upfrom4%in2020.BatteriesrequireClass1nickel(>99.8%purity),whileClass2nickel(<99.8%purity)cannotbeusedwithoutfurthersignificantprocessing.Nickel-basedcathodesarethedominantEVbatterychemistriestodayandareexpectedtoremainsointhefutureduetothedemandforlongerdrivingrangeEVsparticularlyinEuropeandtheUnitedStates.ThereisalmostseventimesmorenickelthanlithiumbyweightinanNMC811battery,therefore,EVLi-ionbatterypricesaremostsensitivetonickelprices.ThisisofsignificantcurrentconcerngiventhewarinUkrainebecauseRussiaistheworld’slargestsupplierofClass1battery-gradenickel,producingaround20%ofglobalsupply.GlobalsupplychainsofEVbatteriesPAGE19EVbatteriesandsupplychainsMakingbatteriesforEVsrequiresseveralstagesEVbatterysupplychainIEA.Allrightsreserved.GlobalsupplychainsofEVbatteriesPAGE20EVbatteriesandsupplychainsProductioninallstagesoftheEVbatterysupplychainisconcentratedinfewcompaniesShareoftotalproductionoftop-threecompaniesateachstageoftheEVbatterysupplychain,2021IEA.Allrightsreserved.Notes:Thefigureshowsproductionpercentagesoftop-threecompaniesfor2021:EVproductionbysales;batteryproductionbyMWhproduced;cathodeandanodebyproductioncapacity;miningbyproductioncapacity.Top-threecompaniesbyproduction(countrywhereheadquartered):lithium-SociedadQuímicayMineradeChile(Chile);PilbaraMinerals(Australia);Allkem(Australia);nickel-JinchuanGroup(China);BHPGroup(Australia);ValeSA(Brazil);cathode-Sumitomo(Japan);TianjinB&MScienceandTechnology(China);ShenzhenDynanonic(China);anode-NingboShanshan(China);BTRNewEnergyMaterials(China);ShanghaiPutailaiNewEnergyTechnology(China);batteryproduction-CATL(China);LGEnergySolution(Korea);Panasonic(Japan);EVproduction-Tesla(UnitedStates);VWGroup(Germany);andBYD(China).Sources:IEAanalysisbasedonBenchmarkMineralIntelligence;BloombergNEF;S&PGlobal.0%25%50%75%100%LiNiMiningCathodeAnodeCellComponentsBatteryproductionBatterycellsEVproductionEVsGlobalsupplychainsofEVbatteriesPAGE21EVbatteriesandsupplychainsEVbatterysupplychainsEVbatterysupplychainsconsistofmultiplecomplexstagesthatarespreadaroundtheworld.Fromextractingthenecessarymineralores,refiningtoformsufficientpuritychemicals,thenadvancedmaterialssynthesistoformcathodeandanodematerials.Similarcomplexsupplychainscharacteriseotherbatterycomponentssuchaselectrolytesandseparators.CellsarethenfabricatedandhousedinmoduleswithinabatterypackwhichisintegratedintotheEV.TounderstandcurrenttrendsandfutureprospectsofEVs,itiscriticaltounderstandallofthestagesinthiscomplexsupplychain.MiningThefivekeybatterymaterialsarelithium,nickel,cobalt,graphiteandmanganese.2Lithiumisextractedfromtwoverydifferentsources:brineorhardrock.LithiumbrinesareconcentratedsaltwatercontaininghighlithiumcontentsandaretypicallylocatedinthehighelevationareasofBolivia,ArgentinaandChileinSouthAmericawithChilebeingthelargestproducer.Brinedepositsoftencontainlargequantitiesofotherusefulelementssuchassodium,potassium,magnesiumandboronwhichoffsetssomeofthecostofpumpingandprocessingbrine.Lithiumhardrock(spodumene)isprimarilymined2Thebatterymetalsfocusedonforthisanalysisarelithium,nickelandcobalt.Foranalysisofothercriticalminerals,seeIEA’sTheRoleofCriticalMineralsinCleanEnergyTransitionsreport.inAustralia.Novelprocessesarebeingdevelopedtoextractlithiumfromunconventionalresourcessuchasgeothermalbrine.Currently,thetop-fivelithiumsuppliersaccountforabouthalfofgloballithiumproduction.Majorlithiumsuppliersincludeamixtureoflargechemicalandminingcompaniesincluding:SociedadQuímicayMineradeChileSA(Chile);PilbaraMinerals(Australia);Allkem(Australia);LiventCorporation(UnitedStates);andGanfengLithiumCo.(China).Unlikeforotherbatterymetals,lithiumextractioncompaniestendtobespecialisedinlithiumminingandchemicalcompanies.Nickelisfoundprimarilyintwotypesofdeposit–sulphideandlaterite.SulphidedepositsaremainlylocatedinRussia,CanadaandAustraliaandtendtocontainhighergradenickel.ItismoreeasilyprocessedintoClass1battery-gradenickel.Laterite,however,tendstocontainlowergradenickelandismainlyfoundinIndonesia,PhilippinesandNewCaledonia.Lateriterequiresadditionalenergyintensiveprocessingtobecomebattery-gradenickel.Nickelproductionislessconcentratedthanlithiumwithaboutninecompaniessupplyinghalfofglobalnickelproduction.KeynickelGlobalsupplychainsofEVbatteriesPAGE22EVbatteriesandsupplychainssuppliersinclude:JinchuanGroup(China);BHPGroup(Australia);ValeSA(Brazil);Tsingshan(China);NickelAsiaCorporation(Philippines);andGlencore(Switzerland).Cobaltispredominantlyminedasaby-productofcopperornickelmining.Over70%ofcobaltisproducedintheDemocraticRepublicofCongo(DRC)andGlencore(Switzerland)isthelargestglobalproducer.Otherkeycobaltsuppliersinclude:JinchuanGroup(China);CNMolybdenum(China);andChemaf(DRC).Artisanalandsmall-scaleminingisresponsiblefor10–20%ofcobaltproductionintheDRC.Graphiteisthedominantanodematerialandcanbefoundnaturallyorproducedsynthetically.NaturalgraphiteminingisdominatedbyChina(80%),thoughglobalproductionisbecomingmorediversified,withmanygreenfieldgraphiteminingprojectsbeingdevelopedincludinginTanzania,Mozambique,CanadaandMadagascar.Manganeseresourcesaremorewidelydistributedaroundtheworldthantheotherbatterymetalsandremainavailableatrelativelylowcost.Thereisageneralexpectationthattherewillnotbeanoreshortageinthenearterm.TheleadingproducersofmanganeseoreincludeSouthAfrica,Australia,GabonandChina.RawmaterialprocessingBatteriesrequirehighpuritymaterialsandthereforehigh-gradesources,aswellassignificantrefining,isrequiredtoreachsufficientqualitybatterychemicalprecursors.Theserefiningprocessestypicallyinvolveheavyindustrialprocessesbasedonheatorchemicaltreatment(typicallypyrometallurgyand/orhydrometallurgy)torefinetheraworeintotheusualrequiredchemicals,lithiumcarbonateorhydroxide,orcobaltandnickelsulphate.Addingcomplexity,certainrawmaterialsaremoreoronlysuitablefortheproductionofbatteryprecursors.Forinstance,lithiumcarbonateisproducedfromlithiumbrine,whichisusefulforwiderlithiumdemand,however,unsuitableforuseinleadinghigh-nickelLi-ionbatteries.Lithiumhydroxideismoresuitableforhigh-nickelchemistriesandismoreeasilyproducedfromspodumenehardrocksources.Similarly,batteryproductiontypicallyrequiresnickelsulphate,typicallyonlysynthesisedfromClass1nickel,whichismosteconomicallyproducedfromnickelsulphides.Class2nickelcanbeprocessedintoClass1nickelbutrequiressignificantadditionalprocessing.Newprocessingtechnologies,however,areincreasingtheflexibilityofnickelprocessingroutes.Theseinclude:•High-pressureacidleaching(HPAL)isaprocesswhichisabletoproduceClass1nickelfromlowergradelateriteresources.•Mixedhydroxideprecipitate(MHP),anintermediateproductinnickelrefining,canbefurtherberefinedintonickelsulphatesatlowcostfromlateriteresources.•Nickelmatte(abattery-gradenickelprecursor)canbeproducedfromlateriteresources,butismoreemissions-intensivethanconventionalproductionroutes.GlobalsupplychainsofEVbatteriesPAGE23EVbatteriesandsupplychainsRawmaterialprocessingishighlyconcentrated.Forexample,inlithiumcarbonateandhydroxideproduction,fivemajorcompaniesareresponsibleforthree-quartersofglobalproductioncapacity.Oftentherefiningisdonebytheminingcompanytogetherwiththeextraction.Forexample,Ganfeng,aChineseminingcompany,hasevolvedtoincludeprocessingandrefininglithiumandisincreasinglyfocussedonboostingtheirlithiumhydroxideproduction.Inothercases,itisexportedtothirdpartiestodotherefining,withmanyprocessingcompaniesinChina,suchasChengxinLithiumGrouporZhejiangHuayouCobalt.ThisisparticularlythecaseforAustralianspodumeneasalmostnominersyetproduceintegratedlithiumchemicalsupply.Whilemanganeseresourcesarewidelydistributed,productionofhigh-puritymanganesesulphateraisesconcernsaroundgeographicalconcentrationofsupply.Chinacurrentlyaccountsforaround90%oftheglobalproductioncapacity,raisingtheneedfornew,diversifiedmanganeserefiningcapacity.NewmanganesesulphateprojectsarestartingtocomeonlineinAustralia,Europe,IndonesiaandUnitedStates.CellcomponentproductionBatteriesarecomprisedofseveralhighlyspecialisedcomponentsincludingcathodeandanodematerials,electrolytesandseparators.Thesecomponentsrequireadvancedmaterialschemistryandengineeringfortheirproduction.Themostcomplexprocessingisrequiredtoformthebatteryactivematerialsfromthehighpuritychemicalsproducedfromrawmaterialprocessing,suchaslithiumhydroxideandnickelsulphate.Thesematerialsarefurtherprocessedusingspecialisedsynthesestoproduceactivematerialsforthecathodeandanode.TheleadingcathodeactivematerialsforLi-ionaretransitionmetaloxidesincludinglithiumcobaltoxide,lithiumnickelmanganesecobaltoxide(NMC),lithiumnickelcobaltaluminiumoxide(NCA)andlithiumironphosphate(LFP).Sevencompaniesareresponsiblefor55%ofglobalcathodematerialproductioncapacity.Keyplayersinclude:Sumitomo(Japan);TianjinB&MScienceandTechnology(China);ShenzhenDynanonic(China);andNingboShanshan(China).Thedominantanodeactivematerialisgraphitewhichcanbenaturalorsynthetic.Producinggraphiteanodematerialsismorematureandestablishedthancathodematerialproductiongivengraphitehasbeenthedominantanodeforalongtime,thoughbothgraphitetypesrequiresophisticatedprocessing.Flakenaturalgraphiteisusedinbatteriesandisprocessedintosphericalgraphitetobemorehomogenousforuseasanodematerial.Syntheticgraphiteisproducedfromrefininghydrocarbonmaterialssuchascoke.Toimprovegraphiteanodeperformance,smallandincreasingfractionsofsiliconarebeingaddedtothegraphiteanodetoincreaseenergydensity.Anodematerialproductionisevenmorehighlyconcentratedwithfourcompaniesresponsibleforhalfofglobalproductioncapacity.Thelargestplayersinclude:NingboShanshan(China);GlobalsupplychainsofEVbatteriesPAGE24EVbatteriesandsupplychainsBTRNewEnergyMaterials(China);andShanghaiPutailaiNewEnergyTechnology(China).Thetop-sixcompaniesareallChineseandaccountfortwo-thirdsofglobalproductioncapacity.Separatorsareengineeredmicroporousmembranes,typicallymadeofpolyethyleneorpolypropyleneandoftenceramiccoatedforimprovedsafetyforEVs.Separatorproductionisalsoconcentratedwithfivecompaniesresponsibleforhalfoftheglobalproductioncapacity.Keyplayersinclude:ZhuhaiEnjieNewMaterialTechnology(China);ShanghaiPutailaiNewEnergyTechnology(China);andSKIETechnology(Korea).Electrolytesaremadeofasaltandsolventandbothrequiresynthesisandthenmixing.JiangxiTinciCentralAdvancedMaterialsinChinaaloneproduces35%ofglobalelectrolytesalt.Thetopelectrolyteproducingcompaniesinclude:ZhangjiagangGuotai-HuarongNewChemicalMaterials(China);ShenzhenCapchemTechnology(China);andNingboShanshan(China).Mostcompaniesthatengageincellcomponentmanufacturingarehighlyspecialisedandonlyproducethosecomponents.BatterycellandpackproductionProducingthebatterycellsisamulti-stepprocesswithtwobroadstages:electrodemanufacturingandcellfabrication.Thoughcellmanufacturershavedifferentcellsdesigns,thecellmanufacturingprocessesaresimilar,usematuretechnologiesandarewellestablished.Theseprocessesareenergyintensive,beingconductedinhighlycontrolledcleananddryroomconditionstoavoidanyimpuritiesandmoisture.Usinglow-carbonsourcesofelectricityiskeytoreducingemissionsincellproduction.Firstelectrodesareproducedbymixingcathodeoranodeactivematerialswithabinder,solventandadditivesbeforecoatingonaluminium(cathode)orcopper(anode)foilcurrentcollectors.Theelectrodesarerolled(calendared)andsubsequentlydried.Thecellisthencreatedbystackingtheelectrodeswithaseparatorinbetween.Manufactureofthebatterypackmaybecompletedeitherbythecellmanufacturerorbytheautomaker.Cellsarefirsthousedtogetherinmoduleframes,thenthebatterypackisassembledthroughintegrationofmodules,thebatterymanagementsystem,electronicsandsensors,allencasedinafinalhousingstructure.Batterycellproductionisacapital-intensiveprocessandproductionishighlyconcentrated,withthetop-threeproducersin2021,CATL(China),LGEnergySolution(Korea),andPanasonic(Japan),accountingfor65%ofglobalproduction.CellmanufacturersfromJapanandKoreatendtobeestablishedconglomerateshavingdecadesofexperiencemakingbatteriesforconsumerelectronics.TherearealsoChinesecompaniesthatbeganproducingbatteriesforconsumerelectronicsinthe1990sandthenspecialisedinbatteriesforEVssuchasCATLandBYD.AthirdwaveofnewbatterymakersistakingshapeinEuropeandNorthAmerica,buttodaytheyaremostlyinplanningorupscalingstages.WithrecentsupplychainstrainsmanybatteryandautomakersarebecomingincreasinglyGlobalsupplychainsofEVbatteriesPAGE25EVbatteriesandsupplychainsinvolvedintheminingandprocessingofcriticalmineralstoensureaccesstoproduction;Tesla,CATLandLGEnergySolutionhaveallbecomedirectlyinvolvedinupstreamstages.EVproductionThebatterypackisintegratedintotheEVbytheautomakers,whereitisconnectedwiththeelectricmotor,on-boardchargemodule,highvoltagedistributionbox,electrictransmissionandthermalsystems,dependingonthevehiclearchitecture.AutomakersfocussingonlyonEVsmustdevelopgreenfieldfactories,whileforincumbentautomakerspre-existingvehicleassemblyfactoriescanberetooledandrepurposedforEVproduction.EVmanufacturingiscurrentlyconcentratedinasmallnumberofOEMs,withthetop-sixcompaniesresponsiblefor52%ofproductionin2021.Thisisaslightdecreasefrom2020wherethetop-sixwereresponsiblefor55%.Thethreelargestproducers,Tesla(UnitedStates),VWGroup(Germany)andBYD(China),accountedforathirdofEVproductionin2021.TherapidgrowthofBYDhasbeenparticularlyimpressive,itwasnotevenamongthetop-sixproducersin2020,butrankedasthethird-largestproducerofEVsin2021.Re-useRe-useorrepurposinginvolvesrefurbishingEVbatteriesforlessdemandingsecond-lifeapplications,typicallyinstationarystorage.SpentEVbatteriestypicallystillhavearound80%oftheirusablecapacity,therefore,repurposinggeneratesadditionalvaluefromthesebatteries.Re-userequiresdisassemblyofthepack,testingofthemodule/cells,andrepackagingintonewpacksfornewapplications.Theprimarydriversofcostofrefurbishingbatteriesarethelogisticsinvolvedintheircollection,testingofremainingusefullife,andthephysicaldisassemblyandrepackingofcells/packs.Re-use,however,faceseconomicandregulatorychallengesincludingensuringreliablegradingofcells/packs,liabilityandensuringthecostofrepurposingiscompetitivewithnewbatteries.RecyclingTherearethreeprimarymethodsforLi-ionbatteryrecycling:pyrometallurgy,hydrometallurgyanddirectrecycling.Pyrometallurgyinvolvessmeltingthebatteryinahightemperatureoven,recoveringonlyafractionofmetalsfromthecathode.Hydrometallurgyinvolvesachemicalleachingprocesstoprecipitateoutindividualmetals.Currently,mostbatteryrecyclingusesacombinationofpyrometallurgyandhydrometallurgyastheyarewellsuitedtoapoorlysortedfeedstockofcells.Thesemethodsrelyonreclaimingtheexpensivemetalsspecificallynickelandcobalt,andoftenthecopperandaluminium.Currentglobalcapacityforbatteryrecyclingisaround200kt/yearwithChinaaccountingforabouthalf.Thisdominantpositionisexpectedtoberetainedduetoannouncedadditionalcapacity.Mostbatteryrecyclingcompaniesareindependentrecyclers,butOEMs,batterymanufacturers,minersandprocessorsarestartingtoenterthemarket.Directrecyclingisanemergingprocess,offeringimprovedrecyclingefficiency,asitdoesnotbreakdownthecathodeintoelements,butGlobalsupplychainsofEVbatteriesPAGE26EVbatteriesandsupplychainsinsteadretainsthematerialcrystalstructureandregeneratesthecathodematerial.Thisretainstheembeddedenergyandeconomicvalueincathodeprocessing,avoidingtheneedtoresynthesisefromrawmaterials.ItiswellsuitedtocathodescontaininglittlevaluablemetalssuchasLFP.However,itislimitedbyitsinflexibilityasitmustbetailoredtoeachcathodechemistry,andrecoveredcathodescanonlybeinputintoproductionofthesamebatterytype.Though,newprocessingmethodsareunderdevelopmenttoconvertrecycledchemistriesintocurrentchemistriese.g.,NMC333toNMC811.Policymandates,forinstance,extendedproducerresponsibilityforbatteryrecycling,arespurringtheformationofjointventuresamongOEMs,re-useandrecyclingcompanies.Forinstance,SKInnovationandKiaaredevelopingbothre-useandrecyclinginitiatives;Kiaevaluatesusedbatteriesandrepackagesonessuitableforre-useinstationarystorageandtherestaresenttoSKInnovation’srecyclingprocessformaterialrecovery.Renault,VeoliaandSolvayhaveformedaconsortiumforthesamepurpose.BMW,UmicoreandNorthvolthavealsoformedaconsortiumtocreateaclosed-loopforbatterycells,involvingbothre-useandrecycling.GlobalsupplychainsofEVbatteriesPAGE27EVbatteriesandsupplychainsChinadominatestheentiredownstreamEVbatterysupplychainGeographicaldistributionoftheglobalEVbatterysupplychainIEA.Allrightsreserved.Notes:Li=lithium;Ni=nickel;Co=cobalt;Gr=graphite;DRC=DemocraticRepublicofCongo.Geographicalbreakdownreferstothecountrywheretheproductionoccurs.Miningisbasedonproductiondata.Materialprocessingisbasedonrefiningproductioncapacitydata.Cellcomponentproductionisbasedoncathodeandanodematerialproductioncapacitydata.Batterycellproductionisbasedonbatterycellproductioncapacitydata.EVproductionisbasedonEVproductiondata.AlthoughIndonesiaproducesaround40%oftotalnickel,littleofthisiscurrentlyusedintheEVbatterysupplychain.ThelargestClass1battery-gradenickelproducersareRussia,CanadaandAustralia.Sources:IEAanalysisbasedon:EVVolumes;USGeologicalSurvey(2022);BenchmarkMineralIntelligence;BloombergNEF.ChinaEuropeUnitedStatesJapanKoreaDRCAustraliaIndonesiaRussiaOtherBatteryproductionBatterycellsCathodeAnodeCellcomponents0%25%50%75%100%LiNiCoGrMiningLiNiCoGrMaterialprocessingEVproductionEVsGlobalsupplychainsofEVbatteriesPAGE28EVbatteriesandsupplychainsThereareareasofunrealisedpotentialfordiversifyingbatterymetalextractionCurrentminingproductionversusreservesforbatterymaterialsIEA.Allrightsreserved.Notes:Li=lithium;Ni=nickel;Co=cobalt;Gr=graphite;DRC=DemocraticRepublicofCongo.ReservesrefertoeconomicallyextractableresourceasdefinedanddeterminedbytheUSGeologicalSurvey.Sources:IEAanalysisbasedonUSGeologicalSurvey(2022).ChinaEuropeUnitedStatesDRCAustraliaIndonesiaChileBrazilEastAfricaRussiaOther0%25%50%75%100%ProductionReservesProductionReservesProductionReservesProductionReservesLithiumNickelCobaltGraphiteGlobalsupplychainsofEVbatteriesPAGE29EVbatteriesandsupplychainsChinadominatestheentiredownstreamEVbatterysupplychain,butinvestmentsareunderwayworldwideChinadominatesproductionateverystageoftheEVbatterysupplychaindownstreamofmining.Three-quartersofbatterycellproductioncapacityisinChina,withthesameforthespecialisedcathodeandanodematerialproduction,forwhichChinaaccountsfor70%ofcathodeand85%ofanodematerialglobalproductioncapacity.Overhalfofglobalrawmaterialprocessingforlithium,cobaltandgraphitealsooccursinChina.With80%ofglobalgraphitemining,Chinadominatestheentiregraphiteanodesupplychainend-to-end.EuropeisresponsibleforoveraquarterofEVproduction,butholdsverylittleoftherestofthesupplychainapartfromcobaltprocessingat20%,mostlyplantsinFinland.TheUnitedStateshasasmallerroleintheglobalEVbatterysupplychain,withonly10%ofEVproductionand7%ofbatteryproductioncapacity.BothKoreaandJapanhaveconsiderablesharesofthesupplychaindownstreamofrawmaterialprocessing,particularlyincathodeandanodematerialproduction.Koreaisresponsiblefor15%ofcathode,and3%ofanodematerialproductioncapacitywhileJapanaccountsfor14%and11%,respectively.Intermsofrawmaterialsupplyandextraction,batterymetalsarehighlyconcentratedgeographicallyandthusarerelativelymorevulnerabletosupplyshocksandconstraints.Morethanhalfoftheworld’slithiumisproducedinAustraliawhile70%oftheworld’scobaltisproducedintheDRC.Nickelsupplyisslightlymorediverse;Indonesiahasthelargestshareofproductionwithalmost40%oftotalnickelsupply,yettodaylittleofitisusedintheEVbatterysupplychainasitmostlyproducesClass2nickel.NotonlyisRussiatheworld’sthird-largestproducerofnickel,moresignificantly,itistheworld’slargestproducerofClass1battery-gradenickelwitharound20%oftheglobalsupply.Thegeographicaldistributionofmineralextractionisunlikelytoshiftsignificantlyintheneartermgiventoday’sprojectpipeline.However,whencomparingcurrentminingproductiontomineralreserves(reservesrefertotheresourceswhichcouldbeeconomicallyextractedatthetimeofdetermination),thereappearstobesignificantunrealisedpotentialfordiversificationofextractioninthelongerterm.Inparticular,Australia,alreadythelargestlithiumproducer,holdsthejointlargestreservesofnickel,alongsideIndonesia,with22%ofglobalreserves.However,Australiaisproducingonly6%ofcurrentglobalproduction.Australiaalsohasthesecond-largestreservesofcobaltwithalmost20%,whileaccountingforamere3%ofcurrentproduction.ThereisalsosignificantpotentialtodiversifynaturalgraphiteproductionwithEuropeholdingtheworld’slargestsharewithoveraquarterofglobalreserves,primarilyinTurkey.BrazilhassignificantGlobalsupplychainsofEVbatteriesPAGE30EVbatteriesandsupplychainspotentialforgraphiteandnickel,with22%and17%ofglobalreserves,respectively.Nevertheless,thereareseveralcaveatswhichmustbeconsideredwithreservessuchasresourcequality,particularlyimportantforbatterymetals,investmentandabove-groundconstraintswhichmaylimitpotentialasareliablesourceoffuturesupply.Thereisaneedforupdatedandimprovedgeologicalsurveysinemergingmarketanddevelopingeconomies.Resourcesurveysinmanylowincomecountrieswereconductedlongagowhenbatterymetalswerenotinfocus.AnexampleistheEastAfricanNickelBeltwheretheUSGeologicalSurveyindicateslimitedAfricanickelreservenumbers.However,in2021,BHPstruckadealtoinvestUSD100millionintheKabangaNickelprojectinTanzania,reportingitasoneoftheworld’slargestnickelsulphidedeposits.Similarly,Boliviahasabundantidentifiedlithiumresources,yetnoreportedreserves.Thishighlightsthepotentialthatupdatedgeologicalsurveyscanbringintoday’smarketcontext.Ontheotherhand,thedownstreamsupplychaindistributionissettochangethisdecade,particularlyforbatteries.Ifcurrentpolicies,announcementsandinvestmentsarerealised,bytheendofthisdecadeaquarterofbatteryproductioncapacitywillbelocatedinEuropeandtheUnitedStates.Similarly,therehavebeenrecentannouncementsrelatedtocathodematerialsproductioninEuropeandtheUnitedStates.Forexample,VolkswagenannouncedanewpartnershipwithUmicorethataimstobuildcathodematerialproductioncapacityinEurope.RedwoodMaterialsandL&FaimtobuildaUSfactoryproducingcathodematerialfor5millionEVsperyearby2030,withsimilarplansforEurope.Northvolt,theEuropeancellmanufacturer,intendstoproduceover100GWhperyearofitsowncathodematerial.AnodematerialproductionislikelytocontinuetobedominatedbyChinaasitholdstheentiresupplychainfromminingthroughtoanodematerialproduction.Inaddition,almostallofthetop-tenanodematerialproductioncompaniesareChinese,whichmakesnewanodeproductionoverseaslargelydependentonforeigninvestmentbythesecompanies.Moreover,graphiteanodematerialpricesarenothighenoughtosignificantlyincentivisenewproductioncapacity.Althoughthereareexceptions,suchasNouveauMondeGraphitewhichisconstructingbothagraphitemineandgraphiteanodeactivematerialplantinCanada.GlobalsupplychainsofEVbatteriesPAGE31EVbatteriesandsupplychainsImpactofRussia’sinvasionofUkraineonbatterysupplychainsLithium,cobaltandgraphitesupplychainsarelessaffectedbythesupplydisruptioncausedbyRussia’sinvasionofUkraineasrelativelylittlesupplyandprocessingisfromeithercountry.However,thereisconcernregardingnickel;Russiaisthethird-largestproducer,supplyingabout9%andprocessingabout6%ofglobalnickelin2021.Though,morecritically,Russiaistheworld’slargestClass1nickelsupplier,producingabout20%oftheworld’sClass1battery-gradenickel,mostofwhichissuppliedbyNorilskNickel.RecentconcernsforthesupplyofnickelfromRussia,coupledwithfinancialspeculationbythefounderofTsingshan,amajorChinesesteelproducer,pushednickelpricestoanunprecedentedlevelofUSD100000pertonne(theaveragepricein2021wasUSD18500pertonne),resultingintheLondonMetalExchangetemporarilyclosingnickeltrade.Muchoftheexceptionalpricerisewasduetoashortsqueeze,however,therewasanunderlyingincreaseinpricedrivenbyRussiansupplyconcernsinanalreadytightsupplymarket.TradingresumedandthenickelpricestabilisedataroundUSD33000pertonne,stillexceptionallyhigh.Nevertheless,significantconcernsfornickelsupplyfromRussiaremain,whichwilllikelykeeppriceshigh.NickelsupplyfromRussiaisakeysourceforthedevelopingEVbatterysupplychaininEurope.BASF(Germany)isbuildingamajorcathodematerialprecursorplantinFinlandandalreadyhasalong-termnickelsupplyagreementwithNorilskNickel.ItispossiblethatAustraliaandCanadacouldfillthegapofsupplyfromRussiafornickelsulphateinEurope,aswellasIndonesiaonceHPALprojectsareoperational,thoughEuropewillalsobecompetingwithNorthAmericandemand.Class1nickelproduction,2021IEA.Allrightsreserved.Sources:IEAanalysisbasedonBenchmarkMineralIntelligenceandBloombergNEF.Russia20%Other80%ShareofClass1nickelproductionEurope67%China33%RussiaClass1nickelexportGlobalsupplychainsofEVbatteriesPAGE32EVbatteriesandsupplychainsEVbatterysupplychainsandindustrialpolicyGlobalsupplychainsofEVbatteriesPAGE33EVbatteriesandsupplychainsGovernmentsaimtosupportintegratedsupplychainsforEVmanufacturingManycountrieshaveannouncedindustrialstrategiesthataimtocreateandexpandtheirprominenceandwithinintegratedsupplychains.MajorautomotivemanufacturingcountriesaimtoextendtheirreachupthesupplychainfrommakingEVcomponentsandautomobiles,toalsosecuringstableupstreamsupplyandrefiningcapacityofmineralsandmetalsSomecountrieshaveidentifiedbatteryandEVmanufacturingtobestrategicsectorsandlooktosupportdomesticproduction.Someexplicitlytargetinvestmentinthesectorto“futureproof”economies,buildaworkforcetounderpinalow-carbonfutureandsecureapositiontobeamarketleaderinthehighvalue-addedstepsintheburgeoningEVmarket.China’srisetothelargestshareofglobalEVbatteryproductioncapacityintheworld(77%)isadirectresultofoveradecadeofgovernmentpoliciesthatsupporttheindustry.Korea,whichaccountsfor5%ofglobalproductioncapacity,alongwithJapan,at4%,haverecentlylaunchedlargefundingpackagestobolsterthecompetitivenessoftheirbatteryandEVindustries.WhiletheEuropeanUnionhasbeeninvestingsignificantlyoverthelastfewyearsinR&Dandmanufacturingcapacity,itwilllikelytaketimetodevelopthesupplychainsneededforanEUbatteryproductionindustry.Similarly,theUnitedStatesrecentlyreneweditsfocusonbuildingdomesticbatteryandEVsupplychains,particularlyleveragingitscriticalmineralssupplyandautomotivesectors.OthernewentrantssuchasIndonesiaandThailandareputtingastrategicfocusonbatteryandEVproduction.TheyaimtobecomeregionalmarketleadersbyleveragingtheirgeographicproximitytoAsianmarketleadersaswellasupstreammineralandmetalsupplies.IndonesiaandThailandareattractinginvestmentsfrommajorbatteryandEVmanufacturerssuchasGreatWallMotors,Foxconn,LGGroupandCATL.Canada•ShareofglobalEVbatteryproductioncapacity:0%.•EVbatteryproductioncapacityin2021:0GWh.InApril2022,thefederalgovernmentandprovincialgovernmentofOntarioannouncedaCAD518million(USD398million)packagetosupplementGeneralMotorofCanada’sexistingCAD2.3billion(USD1.8billion)investmentinupgradingfacilitiesinOntario,whichincludesretoolingfacilitiestoproduceEVs.Inaddition,OntarioreceiveditslargestautomotiveindustryinvestmentinhistoryofCAD5billion(USD4billion)withajointventurebetweenLGEnergySolutionLtd.andStellantisN.V.toproduceEVbatterieswithaGlobalsupplychainsofEVbatteriesPAGE34EVbatteriesandsupplychainsproductioncapacityof45GWh.Thegovernmentsworkedcloselytofosterthisinvestment,suchasprovidingfavourableelectricitypricesandprovincialandfederalsubsidies(whicharebeingnegotiated).China•ShareofglobalEVbatteryproductioncapacity:76%.•EVbatteryproductioncapacityin2021:655GWh.China'sleadingroleinEVbatteryproductioncapacityisadirectresultofmorethanadecadeofpoliciesthatprioritisethedevelopmentofanintegrateddomesticsupplychain.Chinahaslongviewedbatteriesasastrategicindustrialsector.Releasedinmid-2021,China’s14thFive-YearPlan(2021-2025)focusseson“strategicemergingindustries”,whichincludesnewenergyvehicles(NEVs).Itprovidesguidanceforstateandlocalgovernmentstodevelopplans,includingafocusonhigherqualityandstandardsforNEVmanufacturing,aswellasfocussedR&Deffortsfornext-generationbatterychemistries.Ofparticularnote,areplanstopromotethedevelopmentoftheNa-ionbatteryindustryduringthe2021-25period,usingindustryandproductstandardstoachievescale,lowercostandimprovedbatteryperformance.Regionalfive-yearplans(e.g.Beijing,Shanghai,Guangdong,Tianjin,Jiangsu,FujianandShaanxi)focusonintegratingNEVproductionwithrelatedindusties(i.e.,batterymanufacturingandrecyclingsystems)incollaborationwithlargeindustrialEVcar,componentandbatterymanufacturers.TheyaimtobolsterNEVproductioninindustrialdevelopmentzonesthroughincentivessuchastaxexemptions,preferableloansandco-financing,andtodevelopindustrialproductionbases.Alsoreleasedinmid-2021,China’s14thFive-YearPlanforCircularEconomyDevelopment(2021-2025)aimstostandardisemanagementofresourcesfromthebatteryrecyclingindustry,aswellastointroducebothNEVbatterytraceabilityandbatteryrecyclingtraceabilitymanagementsystems.Administrativemeasuresforthere-useofNEVbatteriesreleasedinAugust2021aimtostandardiseandfurtherdeveloptheindustrybyrequiringbatteryre-useenterprisestoberesponsibleformanagingthewholelifecycleofre-usedproductdesignandproduction,packaging,transportationandrecyclingofthebatteries,ensureproductquality,productcertificationandenvironmentallyresponsibledisposal.TheMinistryofIndustryandInformationTechnologyinNovember2021releasedtwodraftguidelinesforcommentonthedevelopmentoftheLi-ionbatteryindustryinordertostrengthenmanagementofthesector.Theguidelinesproposeplantexpansionstoonlyoccurifproductioncanbeassuredtoexceed50%ofcapacity,technicalstandardsonminimumenergydensity(nolessthan180Watt-hoursperkilogramme),cyclelifeandtheencouragementoftheuseofsolarpowerinthemanufacturingprocess.InJanuary2022,GlobalsupplychainsofEVbatteriesPAGE35EVbatteriesandsupplychainstechnicalspecificationsforpollutioncontrolandtreatmentforwasteLi-ionbatterieswasimplemented(foratrialperiod).EuropeanUnion•ShareofglobalEVbatteryproductioncapacity:7%.•EVbatteryproductioncapacityin2021:60GWh.TheEuropeanUnionhasastrategicfocusonthedevelopmentofdomesticbatterysupplychains.InMarch2022,theEuropeanBatteryAllianceandtheUSLi-BridgeAllianceannouncedacollaborationtoacceleratethedevelopmentofLi-ionandnext-generationbatteries,includingcriticalrawmaterials.TheImportantProjectsofCommonEuropeanInterest(IPCEI)isakeystrategicinstrumentwithregardtotheimplementationoftheEuropeanUnionIndustrialStrategy.Atwo-partIPCEIhasbeenimplementedtopromotebatteryproduction:theIPCEIonBatteriesandtheIPCEIEuropeanBatteryInnovation(EuBatIn).Bothhaveincommonthattheirparticipantsrepresentthecompletevaluechain,frommaterialthroughthecellstothebatterysystemandrecycling.ThereisalsoahighdegreeofnetworkingbetweenthecompaniesandthetwoIPCEIs.TheBatteriesIPCEI,establishedin2019,bringstogethercompaniesheadquarteredinsevenEUmemberstatesfromvariouspartsofthebatteryvaluechain.TheEuBatIn,establishedin2021,bringstogether12EUmemberstatesand40companiestofocusonbatterysupplychainsandhassecuredfundingforEUR2.9billion(USD3.4billion)fortheperiodto2031.TheEuropeanCommissionproposedrevisionstotheEUBatteryDirectivetoelevateittoaregulationaspartofactionstakenfortheGreenNewDealinlate2020.TheyintroducemandatorycarbonfootprintdeclarationsforbatteriessoldinEurope,alongwithminimumrequirementsforrecycledcontentandrequirementsforcollectionandrecyclingofautomotiveEVbatteries.AsofMarch2022,thelatestupdateindicatestheEuropeanParliamenthasreachedaconsensusontheproposedrevisionswithafewamendments.Ofnote,thisincludestheadditionofanewbatterycategory,“lightmeansoftransport”(e.g.electricbicycles)andminimumtargetsforrecoveredcobalt,lead,lithiumornickelfromwaste.TheproposalsaretobediscussedwiththememberstatesintheCounciloftheEuropeanUnion.TheBatt4EUPartnershipwaslaunchedinJune2021tocombineeffortsoftheEuropeanCommissionandmembersoftheBatteriesEuropeanPartnershipAssociation,whichincludesindustryandR&Dstakeholderswithinthebatterysupplychain.ThepartnershipwillfundbatteryR&DandinnovationprojectswithintheframeworkoftheHorizonEuropeProgramme.AMoUwassignedbetweenthetwopartiesstatingthattheEuropeanCommissionwilldirectuptoGlobalsupplychainsofEVbatteriesPAGE36EVbatteriesandsupplychainsEUR925million(USD1billion)infundingbetween2021and2027forbatteryresearchandinnovation.InFebruary2022,theEuropeanCommissiongrantedEITInnoEnergyEUR10million(USD11.8million)towardstheEuropeanBatteryAllianceAcademytohelpbridgeagrowingskillsgapfortheworkforceacrosstheEuropeanbatteryvaluechain.InFrance,aEUR30billion(USD35billion)overallinvestmentplanwaspresentedin2021.ItprovidesforuptoEUR4billion(USD4.7billion)tosupporttheautomotiveindustrytoproduce2millionEVsby2030.InGermany,EUR1billion(USD1.2billion)infundingthrough2022wasallocatedbytheFederalMinistryforEconomicAffairsandClimateActiontoestablishthecountryasagloballeaderinbatterycellproduction.India•ShareofglobalEVbatteryproductioncapacity:0%.•EVbatteryproductioncapacityin2021:0GWh.India’sProductionLinkedIncentivesschemehasastrategicfocusonadvancedautomotivetechnologyandcomponents(includingEV)andadvancedchemistrycellbattery(ACC)sectors.TheautomotiveandautocomponentssectorwasallocatedclosetoINR259billion(USD3.5billion).Withanaimtobuildcapacityof50GWh,theACCsectorwasallocatedINR181billion(USD243million).Subsidiesaretobeprovidedoveraspanoffiveyearsbasedonperformancemetricssuchasenergydensity(ACConly),batterycyclelife(ACConly)andnumberofunitssoldorcomponentsmanufacturedinIndia.ArequestforproposalswaslaunchedinJanuary2022forbothschemes,withthegovernmenttoawardcontractsbyMarch2022.FortheACCscheme,bidstotalled130GWh,closetothreetimestheamountofthemanufacturingcapacitytobeawarded.Atotalof95applicantswereapproved.FinalrecipientsincludebothlargeautomanufacturersandOEMsaswellassmallandmediumenterprisesintheindustry.FortheadvancedautomotivetechnologyandautocomponentsschemeapplicationstotalledaproposedINR450billion(USD6.1billion)forallvehiclecategories,andweresubmittedbybothincumbantautomotiveOEMsandnewmarketentrants.Japan•ShareofglobalEVbatteryproductioncapacity:4%.•EVbatteryproductioncapacityin2021:36GWh.JapanreleasedaStrategicEnergyPlanin2021whichre-emphasisedtargetsunderthe2020GreenGrowthStrategyforincreasingdomesticproductionforvehiclebatteriesto100GWhby2030.GlobalsupplychainsofEVbatteriesPAGE37EVbatteriesandsupplychainsTheBatteryAssociationforSupplyChains,formedinApril2021,includeskeyJapaneseOEMs.Itsfoundingdocumenturgedthegovernmenttoprovidefinancialsubsidiesforbatteryproductionfacilities.Afterconsultations,theJapan’sgovernmentannouncedapackageofJPY100billion(USD910million)forthefiscalyear2021supplementarybudgetfordomesticbatteryproduction.Korea•ShareofglobalEVbatteryproductioncapacity:5%.•EVbatteryproductioncapacityin2021:41GWh.Themid-2021announcementoftheK-batteryblueprintrenewsgovernmentfocusonexpandingtaxincentivesandR&Dspending.ThestatedambitionisforKoreatobethenumberoneEVbatterymanufacturingcountryintheworldby2030.Theformationofa“grand-alliance”betweenthetop-threeKorean(andglobal)domesticbatterymanufacturers(LGEnergySolution,SamsungSDIandSKInnovation)aimstobuildanindustrialnetwork.AfundofKRW80billion(USD69million)willbeestablished,withcontributionsfromthegovernment,companiesandfinancialinstitutions,tosupportbatterytechnology,partsandmaterialsdevelopmentincollaborationwithothercompaniesandacademia.AnadditionalKRW1.5trillion(USD1.3billion)willbemadeavailabletosupportbatterydevelopmentinKoreathroughtaxincentives,R&Dandcapitalinvestments.UnitedStates•ShareofglobalEVbatteryproductioncapacity:7%.•EVbatteryproductioncapacityin2021:57GWh.Anexecutiveorderinearly2021mandatedathoroughassessmentofUSsupplychains.Thisincludestheidentificationofrisksinhigh-capacitybatterysupplychains.Withthisfocusonbatterysupplychainscameahostofstrategicpolicyannouncementsandblueprints.OneincludedthereleaseoftheNationalBlueprintforLithiumBatteries(2021-2030),whichelaboratesavisiontoestablishsecurebatterymaterialsandtechnologysupplychainswithinthecountry.Itaimstosetguidanceforpolicymakers,industryandinvestorsforthelongtermbycreatinggoalsacrosstheentiresupplychain.Theseinclude:securingupstreamrawandcriticalmineralsandmaterialsprocessingbase;creatingdomesticelectrode,cellandpackmanufacturingsectors;end-of-lifecriticalmaterialrecycling;andR&Deffortsonbatterytechnologydevelopment.GlobalsupplychainsofEVbatteriesPAGE38EVbatteriesandsupplychainsInOctober2021,theUSDepartmentofEnergyArgonneNationalLaboratoryannouncedthecreationofLi-Bridge.Itisanewpublic-privatepartnershiptobridgegapsinthedomesticlithiumbatterysupplychain.ItmarksthefirstcollaboarionofitskindintheUSbatteryindustry.InJune2021,USD60millionwasawardedfor24projectstoreduceCO2emissionsfrompassengercarsandlight/heavytrucks.ThisincludesprojectstoaccelerateinnovationforEVbatteries,electricdrivesystemsandnewmobilitysystemtechnologies(automated,connected,electricandsharedvehicles).ThegovernmentapprovedclosetoUSD3billiontoboostproductionofadvancedbatterysupplychainsinFebruary2022undertheInfrastructureInvestmentandJobsAct(BipartisanInfrastructureLaw).Thisincludesfundingforupstreambatterymaterialsandrefiningaswellasforproductionplants,batterycellandpackmanufacturingfacilitiesandrecyclingfacilities.SoutheastAsia•ShareofglobalEVbatteryproductioncapacity:1.0%.•EVbatteryproductioncapacityin2021:8.7GWh.Thailand,whichhasoneofthelargestautomotiveproductioncentresinSoutheastAsia,releasedguidelinestopromoteEVsandstatesitsambitiontohave30%ofallcarsproduceddomesticallytobeEVsin2030.Recentstatementsbygovernmentofficialssignalanintenttostrivefor100%ZEVsalesby2035.Thailand’sEasternEconomicCorridor(EEC)isprovidingincentivesforstrategicmanufacturingcompanies(includingEVs)suchascorporatetaxbreaks,infrastructuredevelopmentandlowinterestloans.ThisspurreddealsforEVandbatteryproductionfacilities,suchaswithChineseautomakerGreatWallMotorsinJune2021andaUSD1billion8GWhbatteryproductionplantbothintheRayongEEC.PTT,thestate-ownedoilandgasgroup,signedajointventuredealwithFoxconntomakeEVsstartingin2024withacapacityof50000electriccarsperyearandtargetedtoexpandto150000by2030.Indonesiahasaproductiontargetof600000electricLDVsand2.45millionelectrictwo-wheelersby2030.ItaimstoleverageitslargerawnickelorereservesupstreamwhileofferingincentivesfurtherdownstreamforEVcomponentproducersandmanufacturers.ThisfollowsonfromthePresidentialRegulationtoprioritisedomesticEVproduction.ItaimstoensureacertainpercentageofIndonesiansourcedEVcomponentsandnickelareusedinEVproduction.TheIndonesiaBatteryCorporation,astate-ownedbatterymanufacturer,wasformedinMarch2021bytheMinistryofState-OwnedEnterprisesandfourotherstate-ownedentities.TheinvestmentneededforthisholdingisIndonesianrupiah(IDR)238trillion(USD17billion).Thecorporation’sproductionGlobalsupplychainsofEVbatteriesPAGE39EVbatteriesandsupplychainstargetisupto140GWhofbatterycellsby2030,ofwhich50GWhwillbeforexport.Forcontext,currentglobalbatteryproductioncapacityisabout871GWh.Amemorandumofunderstanding(MoU)wassignedinJuly2021foranEVbatteryfactorybetweentheMinistryofInvestmentandHyundaiMotorCompanywithacapacityof10GWh,withapricetagofUSD1.1billion.Thefactory,tobebuiltwithKoreanLGGroup,aimstoincorporatebatteryprecursorproductionwithpackproduction,aswellasmining,smeltingandrecyclingfacilities.ThisdealisapartofalargerMoUsignedbyIndonesia’sgovernmentandaconsortiumledbytheLGGroupforUSD9.8billiontodevelopintegratedEVsupplychains.Theconsortiumsignedanon-bindingagreementwithPTAnekaTambangTbk,thestate-ownedminingcompany,andIndonesiaBatteryCorporation.Gogoro(knownforbatteryswapping)tofacilitatebatterymanufacturing,andthedevelopmentofEVsupportiveindustriessuchasenergystoragesystemsandbatteryrecycling.ThisincludeFoxconn’sproductionofsolid-stateandlithiumironphosphatebatteries.OtherpotentialdealsincludeaUSD5billionlithiumbatteryplantwithprojectedproductionin2024betweenChina’sContemporaryAmperexTechnology(CATL)andIndonesia’sPTAnekaTambang.Inearly2022,FoxconnsignedaMoUwiththeIndonesia’sMinistryofInvestmentandChineseTaipei’selectricscootermanufacturerGlobalsupplychainsofEVbatteriesPAGE40EVbatteriesandsupplychainsHarmonisedtechnicalregulationsforthesafeandsustainabledeploymentofEVsInadditiontopolicies,financialincentivesandmarketpenetrationtargets,technicalregulationshaveanessentialroletoensurethesafeandsustainabledeploymentofEVs.TheWorldForumforHarmonizationofVehicleRegulations(WP.29),hostedbytheUnitedNationsEconomicCommissionforEurope,developslegallybindingregulationscoveringtechnicalrequirementstoimprovevehiclesafetyandlowerenvironmentalimpacts.UNRegulationNo.100/UNGTRNo.20onElectricVehicleSafetyprescribestestingprocedurestoensureEVsaresafeforuse.ItdetailsmethodologiestotestEVsandprotectusersfromelectricalshocks,ensurefire,water,vibrationandmechanicalresistanceofkeyEVcomponents,amongothersafetytests.UNGTRNo.22onIn-VehicleBatteryDurabilitywasadoptedinMarch2022andprescribesminimumperformancerequirementsforthedurabilityofbatteriesinelectrifiedvehicles.ItrequiresmanufacturerstocertifythatthebatteriesfittedintheirEVswillloselessthan20%ofinitialcapacityoverfiveyearsor100000kmandlessthan30%overeightyearsor160000kms.ThedurabilitystandardaimstopreventtheuseoflowqualitybatteriesandtoensurethatonlydurablebatteriesareinstalledinEVs.ThisiscrucialtoincreaseconsumertrustandtoimprovetheenvironmentalperformanceofEVsbeyondtheirlowemissionsoutput.Makingsureeachbatterylastslongerwouldhelptoeasethepressureondemandforcriticalrawmaterialsneededfortheirproductionandreducewastefromusedbatteries.Similarprovisionsarenowbeingdevelopedforheavy-dutyelectricvehicles(e-busesande-trucks).Thebatterydurabilitystandardwasadoptedbymanycountries/regionsthatcommittedtotransposeitintotheirnationallegislation.TheyareAustralia,Canada,China,EuropeanUnion,India,Japan,Korea,Malaysia,Norway,RussianFederation,SouthAfrica,Tunisia,UnitedKingdomandUnitedStates.IntheEuropeanUnion,theprovisionsareexpectedtobepartoftheforthcomingEuro7/VIIlegislation.GlobalsupplychainsofEVbatteriesPAGE41EVbatteriesandsupplychainsCountriesrushtopushpoliciestoensurestablesupplyofmineralscriticalforEVbatterysupplychainsMajorbatterymineralandmetalproducersaroundtheworldhavebeguntoprioritisenotonlyminingbutrefiningcapacitytobeabletosecurelysupplymaterialsforEVbatterysupplychainsaroundtheworld.AustraliaAustraliaisthelargestproduceroflithiumintheworldandoneofthetopproducersofnickelglobally.InSeptember2021,thegovernmentreleasedanAUD1.3billion(USD980million)loanfacilityforAustraliancriticalmineralstargetedforadvancedsectorsincludingEVbatteryproduction.Inaddition,aAUD2billion(USD1.5billion)fundwasannouncedtoincreasecriticalmineralprocessingcapacity,includingforbatterymineralsandmetals.InDecember2021,thefederalgovernmentawarded“MajorProjectStatus”toaAUD2.4billion(USD1.8billion)batterymineralscomplexinNewSouthWalesforanickelandcobaltmine,materialsprocessingandrecyclingfacility.Havingmajorprojectstatusallowsaccesstoadditionalfinancialsupport,co-ordinationandstreamlinedregulatoryapprovals.Thefacilityisplannedtobepoweredalmostentirelybyrenewables,makingitoneoftheworld’slargestbatterymetalproducersoperatingonrenewableenergy.CanadaToimplementitsCriticalMineralsStrategy,thegovernmentallocatedCAD3.8billion(USD2.9billion)overeightyearsinthe2022budget–thefirstbudgetannouncementofitskind.Ofthis,aroundCAD1.5billion(USD1.2billion)isforinfrastructureinvestmenttosupportcriticalmineralsupplychains,CAD79.2million(USD60.9million)isforintegrateddatasetsforcriticalmineralexplorationanddevelopment,andanew30%taxcreditforcriticalmineralexploration.ChileChileremainsoneofthelargestproducersoflithiumintheworld,thoughtherehasbeenslowgrowthindevelopingnewprojects.Tocounterthistrend,inOctober2021thegovernmentlaunchedaspecialauctionforoperatingcontractstoexploreandproduce400000tonnesoflithium.Dividedintofivetranchesof80000tonneseach,itprovidessuccessfulbiddersaperiodofsevenyearstoconductgeologicalexploration,studiesand20yearsforproduction.Thegovernmentwilltakearoyaltypayment,plusavariablepaymentduringproduction.GlobalsupplychainsofEVbatteriesPAGE42EVbatteriesandsupplychainsChinaChinacontinuestodominateinthemid-todownstreamEVbatterysupplychain,thoughitcurrentlyownslessthan25%ofupstreamminingcapacity.The14thFive-YearPlanfortheDevelopmentoftheRawMaterialsIndustry(2021-2025)wasreleasedinDecember2021.Itaimstofocustechnologicalinnovationinkeymaterialsfordevelopment,includingpromotingtheR&Dofnew,moreefficientandenvironmentally-sensitiveminingtechnologiesandminerals,includingsaltlakelithium.Theplanalsoaimstodevelop“urbanmines”tosupportlarge-scalerecoveryoflithium,nickel,cobaltandtungstenatrecyclingbasesandindustrialclusters.EuropeanUnionFormedin2020,theEuropeanRawMaterialsAlliance(ERMA)wascreatedasapartoftheEU’sActionPlanonCriticalRawMaterials.Alongwithworkingonregulatorybottlenecksandstakeholderengagement,itsfocusistoactasapipelinetocatalyseinvestmentforprojects.ERMAhasannouncedplanstolauncharawmaterialsinvestmentfundplannedfor2022InNovember2021,theEuropeanParliamentvotedintheCriticalRawMaterialsStrategywithafocuson“openstrategicautonomy”,i.e.accesstoalternativesandcompetitionwhensourcingcriticalrawmaterials.OtheraspectsincludesourcingcriticalrawmaterialsfromwithintheEuropeanUnionmemberstates,increasedrecyclingandcircularuseofresources,andinvestmentinrefiningandseparationcapacities(includinglithium).TheEuropeanParliamenthasaskedtheEuropeanCommissionandmemberstatestocreateanIPCEIoncriticalrawmaterialstofocusonreducingcriticalityanddependence.IndonesiaIndonesiaisthelargestnickelproducerintheworld.ItaimstomaintainthatpositionasakeysupplierfortheEVbatterymanufacturingsector.In2020,Indonesiaimposedanickeloreexportban.Thiswasfollowedin2021withconsiderationofimpositionofataxontheexportofnickelproductsthatcontainlessthan70%nickelcontentinanattempttofurtherdevelopdomesticrefiningcapacity.Today,mostnickelproductscontainbetween30-40%nickelandaregenerallyexportedtobefurtherrefinedtohavehigherpuritynickelproducts(70%orabove)andcouldthussignificantlyimpactexports.UnitedStatesInMarch2022,theUnitedStatesinvokedtheDefenceProductionActtorapidlyboostUSproductionofcriticalmineralsforEVandstoragebatteries,focussingonlithium,nickel,cobalt,graphiteandmanganese.Overthepastyear,theUnitedStateshasmadesignificanteffortstoenhanceEVbatterysupplychains,includingcriticalminerals.InFebruary2021,theUSDepartmentofEnergyawardedGlobalsupplychainsofEVbatteriesPAGE43EVbatteriesandsupplychainsUSD44milliontotheMiningInnovationsforNegativeEmissionsResourceRecoveryProgramfortechnologicaldevelopmenttoincreasedomesticcriticalelementsupplies.Thefundfocussesoncommercial-readytechnologiesthatareeithernetzeroornetnegativeemissionsforcriticalmineralsneededforthecleanenergytransition.InApril2021,13criticalmineralprojectswereselectedtoreceiveatotalofUSD19million.Thefundfocusesonprojectsthatwouldhelptransitionfossilfuelproducingcommunitiestowardscleanenergyjobs,includingincreasedrecyclingfromcriticalmineralresourcesandwastestreams,criticalmineralandmetalextractionfromfossilfuelproductsandtheirwastestreamsforuseinvariousapplicationsincludingEVbatteries.InFebruary2022,theUSdepartmentsofEnergy,DefenseandStatesignedaMemorandumofAgreementtosupportstockpilingofcriticalmineralsthatwouldfacilitatethetransitiontocleanenergy,inparticularforbatteriesandwindturbines,andtomeetnationalsecurityneeds.GlobalsupplychainsofEVbatteriesPAGE44EVbatteriesandsupplychainsOutlookforbatteriesandcriticalmaterialsGlobalsupplychainsofEVbatteriesPAGE45EVbatteriesandsupplychainsBatterydemandsurgesinallregionsdrivenbybatteryelectriccarsEVbatterydemandbymode,2021-2030EVbatterydemandbyregion,2021-2030IEA.Allrightsreserved.Notes:STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario;LDV=light-dutyvehicle.0.00.51.01.52.02.53.03.54.0STEPSAPSSTEPSAPS202120252030TWhperyearChinaEuropeUnitedStatesOther0.00.51.01.52.02.53.03.54.0STEPSAPSSTEPSAPS202120252030TWhperyearLDVTwo/three-wheelerBusTrucksGlobalsupplychainsofEVbatteriesPAGE46EVbatteriesandsupplychainsEVsincreasebatterydemandsixfoldanddriverapidexpansioninallpartsofsupplychainsIncreasedEVsalesnecessitateascaleupofallelementsofthebatterysupplychain.Whileformostcomponents,EVsarenottoodifferentfromconventionalvehicles,batteriesrelyondistinctandcriticalmaterialsdependentsupplychainswhichmustdramaticallyscaleupthisdecadetomeetprojecteddemand.Mostsupplychaincomponentscanbescaleduprapidly;batteryproductionfactoriescanbebuiltinundertwoyearsandtheprojectpipelineisverylarge.Ontheotherhand,rawmaterialextractionrequiresinvestmentlongbeforeproductionreachesscale.Plannedbatteryfactoriescanmeet2030demandIntheStatedPoliciesScenario,batterydemandfromEVsincreasesin2030to2.2TWhandto3.5TWhintheAnnouncedPledgesScenario.Thisisamorethansixfoldincreasefromtheproductionlevelin2021fortheStatedPoliciesScenarioandaten-foldincreasefortheAnnouncedPledgesScenario.Achievingsuchproductionlevelsrequiresthemanufactureofanadditional52gigafactoriesof35GWhannualproductioncapacityintheStatedPoliciesScenarioand90gigafactoriesintheAnnouncedPledgesScenario.Batterydemandisdrivenbyelectriccarswhichaccountfor85%oftheprojectedtotalby2030inbothscenarios.Notonlywillelectriccarsalesincrease,butcurrenttrendsandnewmodelannouncementssuggestthatvehicleswillhaveincreasinglyhigherbatterycapacityduetodemandforlongerdrivingrangesandlargervehicles.ThistrendcontributestoaroundathirdoftheriseinbatterydemandandisespeciallypronouncedinNorthAmerica.Chinaisprojectedtohavethelargestbatterydemand,thoughitsglobalshareshrinksfrom60%in2021to40%in2030intheStatedPoliciesScenarioand25%intheAnnouncedPledgesScenario.TheUnitedStatesundergoesthefastestbatterydemandincreaseamongmajormarketsdrivenbyrapidEVdeploymentaswellasthelargestbatterycapacitypervehicle,increasingshareslightlyintheStatedPoliciesScenariowitharound15%in2030from11%in2021andincreasingtoabove20%intheAnnouncedPledgesScenarioin2030.TheshareofglobalEVbatterydemandisalsoprojectedtodecreaseinEuropefrom25%in2021to20%inboththeStatedPoliciesandAnnouncedPledgesScenariosin2030.AccordingtorecentaccountingbyBenchmarkMineralIntelligence,theannouncedbatteryproductioncapacitybyprivatecompaniesforEVsin2030amountsto4.6TWh,ahighervaluethanforboththeStatedPoliciesScenarioandAnnouncedPledgesScenariodemand.Ifalltheannouncedcapacitysuccessfullycameonlineby2030,usingtotalbatterydemand,theutilisationfactorofbatterymanufacturingwouldbe47%intheStatedPoliciesScenario,slightlyhigherthanin2021(43%basedonnameplatecapacity).BatteryproductioncapacitywillstillbeconcentratedinChina(70%),yetmoreGlobalsupplychainsofEVbatteriesPAGE47EVbatteriesandsupplychainsinvestmentsarebeingdirectedtootherregions,withaquarterofbatteryproductioncapacityexpectedinEuropeandtheUnitedStatesby2030.AnodeandcathodeproductionisslowlybecomingmoregeographicallydiversifiedScalingupcellandbatteryproductionwillrequireadditionaloutputfromanodeandcathodemanufacturers.IntheStatedPoliciesScenario,thereisasixfoldincreaseincathodedemandandafivefoldincreaseinanodedemandin2030relativeto2021production.FortheAnnouncedPledgesScenario,cathodedemandincreasesten-foldandanodedemandeightfold.IntheStatedPoliciesScenario,cathodeproductionreaches3300ktandanodeproduction1500ktin2030,requiringaround29additionalcathodematerialplantsand23additionalanodematerialplants.FortheAnnouncedPledgesScenario,cathodedemandis5200ktandanodeis2500kt,requiringabout50cathodeand40anodeplants.ForeachGWhofbatteryproduction,1.5ktofcathodeand0.9ktofanodematerialarerequired.Currentcathodeandanodematerialproductionarehighlyconcentrated;togetherChina,JapanandKoreaaccountfor97%ofcurrentcathodeandand99%ofanodeproduction.Lookingforward,thepicturedoesnotchangemuchinthenearterm.Assessingallcurrentannouncedandunderconstructioncathodeandanodematerialproductionplants,whicharesettobeonlineby2025,showstheUnitedStatesandEuropetogetherwillonlyproducearound4%ofcathodematerialand2%ofanodematerialin2025.IncreaseddiversificationisexpectedinthelongertermbasedonannouncementsofplannedproductioninEuropeandNorthAmerica.Forexample,byBASFwithaplannedcathodematerialproductionplantinCanada.GlobalsupplychainsofEVbatteriesPAGE48EVbatteriesandsupplychainsAllelementsofEVbatterysupplychainsexpandsignificantlytomeetprojecteddemandNumberofminestoproducerequiredlevelsofmetals,anode/cathodeproductionplants,batterygigafactoriesandEVplantsrequiredtomeetprojecteddemandin2030relativeto2021IEA.Allrightsreserved.Notes:STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario.Numberofadditionalmines/plants/factoriesrequiredtomeetprojecteddemandfromthe2021demandlevelisshownbythearrows.Projecteddemandisannual.MetaldemandistotaldemandincludingEVandnon-EVdemand.Assumestheaverageannualproductioncapacities:lithiummine-8kt;nickelmine-38kt;cobaltmine-7kt;cathodeplant-94kt;anodeplant-54kt;batterygigafactory-35GWh;andEVproductionplant-0.5millionvehicles.NickeldemanddoesnotdistinguishbetweenClass1andClass2nickel.Sources:IEAanalysisbasedonS&PGlobal;BloombergNEF;BenchmarkMineralIntelligence.1002003004005006002021STEPSAPS2030kt+30+50Lithium1000200030004000500060002021STEPSAPS2030kt+41+60Nickel501001502002503003502021STEPSAPS2030kt+11+17Cobalt1000200030004000500060002021STEPSAPS2030kt+29+50Cathode500100015002000250030002021STEPSAPS2030kt+23+40Anode50010001500200025003000350040002021STEPSAPS2030GWh+52+90Batterycells10203040502021STEPSAPS2030NumberofEVs(million)+48+81EVsMetalsCellcomponentsBatteriesEVsGlobalsupplychainsofEVbatteriesPAGE49EVbatteriesandsupplychainsDemandforEVbatteriesdrivesasurgeinmetaldemandLithiumisthemostcriticalmetalforEVsasithasnocommerciallyavailablesubstituteatscale.Therefore,itexperiencesthefastestdemandgrowthofthebatterymetals.Practically,alloftheincreaseindemandforlithiumto2030isprojectedtocomefromEVbatteriesinbothscenarios.LithiumdemandintheStatedPoliciesScenarioreachesabout330ktby2030,afourfoldincreaserelativeto2021production(80kt).FortheAnnouncedPledgesScenario,lithiumdemandreaches500kt,asixfoldincreasefrom2021drivenbyhigherEVsalesacrossallmodes.EVbatterieswereresponsibleforalmosthalfofgloballithiumdemandin2021.In2030thisrisesto70%intheStatedPoliciesScenarioandalmost80%intheAnnouncedPledgesScenario.Inordertomeetthissurgeinlithiumdemand,around30newlithiumminesareneededintheStatedPoliciesScenarioby2030and50newlithiumminesintheAnnouncedPledgesScenario,assuminganaverageannuallithiummineproductioncapacityof8kt.By2030,nickelisfacingthelargestabsolutedemandincreaseashigh-nickelchemistriesarethecurrentdominantcathodeforEVs,andareexpectedtoremainso.High-nickelLi-ionbatteriesrequirefarmorenickelthanevenlithium.Forexample,aNMC811batteryrequiresalmostseventimesmorenickelthanlithiumbyweight.Forcobalt,theoppositeistrueasbatterymakerscontinuetomovetolowercobaltcontentchemistries(andevencobalt-freechemistriesby2030)toreducecostsandduetoenvironmental,socialandgovernanceconcerns.However,thesurgeinglobaldemandforEVbatteriesstillincreasestotalcobaltdemandthisdecade.ShareoftotaldemandforbatterymetalsfromEVsandcleanenergytechnologies,2021and2030IEA.Allrightsreserved.Notes:STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario.Cleanenergytechnologiesinclude:stationaryenergystoragebatteries,renewables,nuclear,hydrogentechnologiesandgridtechnologies.Sources:IEAanalysisbasedonS&PGlobal.0%20%40%60%80%100%202120302030202120302030202120302030STEPSAPSSTEPSAPSSTEPSAPSLithiumCobaltNickelOthersCleanenergytechnologiesEVbatteriesLithiumCobaltNickelGlobalsupplychainsofEVbatteriesPAGE50EVbatteriesandsupplychainsIntheStatedPoliciesScenario,totalnickeldemandrises60%toaround4200ktby2030whiletotalcobaltdemandincreases45%to250kt.Outoftotaldemandfornickel,EVbatteriesaccountforafifthofdemandin2030andaboutaquarterofdemandforcobaltintheStatedPoliciesScenario.IntheAnnouncedPledgesScenario,nickelandcobaltdemandfromEVbatteriesis65%higherthanintheStatedPoliciesScenario,withanEVshareof30%and40%,respectively.Tomeettheprojecteddemandin2030intheStatedPoliciesScenario,41nickeland11cobaltadditionalminesareneeded–asignificantscalinguprequirement.FortheAnnouncedPledgesScenario,60nickeland17cobaltnewminesarerequiredin2030,(assumingaverageannualmineproductioncapacityof38ktfornickeland7ktforcobalt).GlobalsupplychainsofEVbatteriesPAGE51EVbatteriesandsupplychainsMeetingbatterymetaldemandin2030andbeyondrequiresinvestmenttobemobilisednow,particularlyinnewminingcapacityRangeoftypicalleadtimestoinitialproductionforselectedstepsinEVbatterysupplychainIEA.Allrightsreserved.Notes:Leadtimesforminesarecalculatedfromcompletionofthepreliminaryfeasibilitystudytothestartofproduction.Forotherelements,leadtimesarecalculatedfrominvestmentdecisiontoproduction.Sources:IEAanalysisbasedonHeijlenetal.(2021);BenchmarkMineralIntelligence;S&PGlobal.05101520EVproductionBattery/cellproductionCathode/AnodeproductionRawMaterialProcessingNickelMineLithiumMineYearsGlobalsupplychainsofEVbatteriesPAGE52EVbatteriesandsupplychainsInvestmentisneedednowtomeetbatterymetaldemandin2030TomeetthedemandforprojectedEVdeploymentvariouselementsinthesupplychainwillneedtoexpand.Rampingupofcountries’climate-relatedamibitionsandpledgeswillalsoincreasedemandfurtherformetalstosupplythenecessaryEVbatteries.Asobservedin2021,demandforEVscanincreaseveryrapidlythoughscalingupsupplyrequirestime,asminesandfactoriescannotbebroughtonlineovernight.Elementsofthesupplychainshavevariousleadtimes.Thedownstreamstage,EVvehicleassembly,isthemostdynamic,sinceautomobileproductioncapacityismuchhigherthandemand,automakerscanretoolexistingfactoriestomanufactureEVs.Forexample,worktoretool(convertaplantfromICEvehiclestoEVs)atVolkswagen’sZwickaufactoryinGermanybeganin2018andthefirstEVswereproducedinNovember2019.Similarly,Tesla’sEVfactoryinShanghaiwascompletedinroughlyoneyearafterbreakinggroundinearly2019.Batteryproductionleadtimescanbemorevaried.InChina,CATLhasbeenabletodeliveranewcellmanufacturingfacilityinunderoneyearduetoexperienceintheirproduction,whilefouryearselapsedbetweentheannouncementofNorthvolt’sfirstfactoryinSwedenandthebeginningofproduction.Anodeandcathodeplantshaveleadtimesthataretypicalforchemicalplants,whichvarybyregion.UmicoreannouncedproductionplansforaplantinPolandin2018,whichisexpectedtobegincommercialproductionin2022,thusrequiringfouryears.InChina,cathodefactoriescanbebuiltinlessthantwoyearsduetopreviousexperienceandtheuseofexistingsitesforexpansion.Byfarthelongestleadtimesareintheextractionofrawmaterials.Afteranextractableresourceisidentifiedthroughexploration,itcantakefromfourtomorethantwentyyearsforaminetobegincommercialproduction.Fourtosixteenyearscanberequiredforthenecessaryfeasibilitystudies,andengineeringandconstructionwork.Longleadtimesareoftenrequiredtosecurefinancingandthenecessarypermits.Securingpermitscantakefromonetotenyearsduetosomecountriesrequiringmultiplepermitsorduetopermittingdelays.Thereissomeevidencethatoverthedecades,thetimerequiredtobringminesonlinehasincreasedandthiscanbepartiallyattributedtolongerpermittingandfeasibilitystudyleadtimes.Inadditiontothetimerequiredtobegincommercialproduction,minesoftenrequirearoundtenyearsbeforetheyreachnameplateproductioncapacity.Ananalysisofleadtimesacrossthesupplychainindicatesthatwithsufficientinvestment,downstreamstagesoftheEVbatterysupplychaincanrampuptomeetevenrapidincreasesindemandinthe2030timeframe.However,upstreammineralextractioncancausemajorbottlenecksunlessadequateinvestmentsaredeliveredwellinadvance.GlobalsupplychainsofEVbatteriesPAGE53EVbatteriesandsupplychainsBatterychemistrieshavenotablydifferentsensitivitiestocommoditypricesImpactof10%commoditypricechangeonthebatterypackpriceforselectedbatterychemistriesIEA.Allrightsreserved.Notes:Na-ion=sodium-ion.Manganese-richchemistries:LMR-NMC=lithium-manganese-richNMC;LNMO=lithiumnickelmanganeseoxide.LNO=lithiumnickeloxide.NMCA=lithiumnickelmanganesecobaltaluminiumoxide.LFP=lithiumironphosphate.NMC=lithiumnickelmanganesecobaltoxide(NMC622andNMC811).Batterypackpricesensitivitytocommodityprices.Allchemistriesmodelledwithgraphiteanode.Cathodethicknesskeptconstantat120µmwithcathodeloadingadjusted.Modelledwith2021averagecommoditypricesasthebaseandthenwith10%increaseinlithium,nickelandcobaltprices.Na-ioncontainsnolithium,nickelorcobalt.Sources:IEAanalysisbasedonBatPaC(2022);Dhiretal(2021);Greenwoodetal(2021);BloombergNEF.0%1%2%3%NMC622NMC811LFPNMCALNOLNMOLMR-NMCNa-ionBatterypackpricechange%LithiumNickelCobaltGlobalsupplychainsofEVbatteriesPAGE54EVbatteriesandsupplychainsBatterychemistriesareevolvinginresponsetotightsupplyTheevolutionofbatterychemistrieswilldeterminewhichmetalswillfacethegreatestdemand.Giventhelongleadtimesrequiredtoincreasemetalproduction,optimisinganddiversifyingbatterychemistrieswillplayanimportantroleinreducingdemandforspecificcriticalmetals.Today,lithium-ionbatteriesforEVsareeithernickel-based(NMCandNCA)orlithiumironphosphate(LFP).TheformerhavehigherenergydensityandaccountforthevastmajorityofEVbatteriesoutsideofChina.LFPhaslowerenergydensitybutalsolowercostandiswidelyusedinChinaforbothlight-andheavy-dutyvehicles.Batterychemistrieswillbemorediversifiedby2030asmanufacturersselectbatterychemistriestoservespecificvehiclecharacteristics.AsexemplifiedbyVolkswagen’sannouncement,chemistrieswillbeadaptedtothevehiclecategory:premiumvehiclescanbeexpectedtousethemosthighenergydensitybatteriesavailable,likelyhighernickelcontentchemistriessuchasNCA95,NMCAandNMC9.5.5,orpotentiallythosewithevenhigherenergydensity,suchaslithiumnickeloxide(LNO)orlithium-manganese-richNMC(LMR-NMC)ifresearchchallengescanbesolvedandcommerciallyviablecyclelifeisachieved.Forlowerend,highvolumeandprincipallyurbanvehicles,LFPwillbetheprimarychemistryasdrivingrangeisnotthepriority,andinsteaditiscost.Moreover,duetohighcommoditypricesfornickelandcobaltandtheexpiryofkeypatents,LFPissetformajorgrowthinvolumemodelsinEuropeandtheUnitedStatesinthecomingyears.AnnouncementshavebeenmadebykeyautomakerssuchasTeslaandVolkswagenforLFPuseforstandardrangeEVsinbothmarkets.ThepossibilityofbatterypackscontainingbothLFPandhigh-nickelrecentlybecamerealitywithNIOannouncingtheirCTPpackincludingbothLFPandNMCcellstoutilisethebenefitsofbothchemistries.Formid-rangevehicles,themanganese-richchemistry(lithiumnickelmanganeseoxide[LNMO])isastrongcontenderasithasahigherenergydensitythanLFP,yetdoesnotreachthelevelsofthehigh-nickelchemistries.ThelargerproportionofmanganeseinLNMOreducesmaterialcostsandcommodityexposureconsiderablycomparedtohigh-nickelchemistries.However,LNMOisstillunderdevelopment.Volkswagenhasindicateditslong-termstrategytopursuemanganese-richchemistriesformass-marketEVmodels.Formediumandheavy-dutyvehicles,LFPwillaccountforthevastmajorityofinstallationsascostandreliabilitywillbemoreimportantfortheearlyapplicationsofelectrictrucks.LFPhasthebestcyclelifeoftheleadingchemistrieswhichsuitsfrequent,shorttripsandbeingrechargedoften.Ontheotherhand,longerrangeelectrictrucksarelikelytousenickel-basedchemistrieswiththehighestenergydensity,buttheirdeploymentintheperiodto2030islimited.GlobalsupplychainsofEVbatteriesPAGE55EVbatteriesandsupplychainsThefutureofbatterychemistriesisnotsetinstone.Thereareadvantagesanddisadvantagesofthevariouschemistries.Asustainedperiodofhighbatterymetalpricesmaythereforehaveadramaticimpactonbatterychemistries,acceleratingtheshiftsalreadyunderwayandanticipatedduetocurrenthighprices.Sustainedhighcommoditypriceswouldsupportashifttowardschemistrieswithlowercriticalmineralintensity.Twoprimaryimpactscanbeexpected.First,astrongershifttocommercialchemistrieswithlowercriticalmaterialintensity,particularlyLFPwhichcontainsnonickelorcobalt.Second,anaccelerationinthedevelopmentofnewchemistrieswhichrelyonlesscriticalminerals,suchasthemanganese-richcathodechemistryLNMOandevenalternativelithium-freebatterychemistriessimilartoLi-ionsuchassodium-ion(Na-ion).Sodium-ionbatteriesWhileresearchersacrosstheworldareworkingtodevelopbatterychemistriesthatdonotuselithium,theclosestmostviableoptiontodayisNa-iontechnology.Na-ioniscurrentlybeingdevelopedbyoneoftheworld’slargestbatterymakers,CATL,whichcommerciallyintroducedNa-ionin2021andplanstoformabasicindustrialsupplychainby2023.AlongsidethedevelopmentsfromCATLforNa-ion,theChinesegovernmentplanstopromotethedevelopmentoftheNa-ionbatteryindustryinits14thFive-YearPlan,withindustrystandardstoachievescale,lowercostandimproveperformance.Na-ioncellswillhavejustoverhalftheenergydensityofleadinghigh-nickelchemistriesandtherefore,willnotbeusedforhighenergydensityapplications.However,itiscomparablewithLFPwithonlyaround20%lowerenergydensitythantheleadingLFPcells.Therefore,forapplicationswhereenergydensityisnotcritical,forexampleurbanEVsorgrid-scalestorage,Na-ionissuitable.CATLisalsomitigatingtheenergydensitylimitationsthroughtheirnewABbatterypackdesignwhichcanintegratebothLi-ionandNa-ioncellsinonepack.ThecriticaladvantageofNa-ionoverLi-ionisthatitreliesonabundantandlowcostminerals.ThecathodematerialfortheCATLNa-ionbattery(PrussianWhite)ismadeoflowcostelementssodium,iron,nitrogenandcarbon.Na-ioncannotusegraphiteanodes,soinsteaduseshardcarbon.Inaddition,lesscopperisrequiredasNa-ioncanusealuminiumanodecurrentcollectors,unlikeLi-ion.WhileNa-ionhasadvancedbeyondtheresearchstagewithdemonstrationofcommerciallyviableperformance,therearenosupplychainstodayforitscathodeandanodematerials.ThemainuncertaintiesaroundthedeploymentofNa-ionisthescalabilityoftheproductionprocessesforthesematerialsandthetimerequiredtodevelopanindustrialscalesupplychain.Fortunately,duetothesimilarityofNa-ionandLi-ion,itisrelativelysimpletoadaptcurrentcellfactoriestotheproductionofNa-ioncells.ConstrainedChemistryCaseToillustratetheimpactofthepossibletrends,wepresenttheConstrainedChemistryCase.Itfocussesoncathodechemistriestoassesstheimpactofpricesremaininghighforlonger,coupledwithaGlobalsupplychainsofEVbatteriesPAGE56EVbatteriesandsupplychainsstrongreactionfromautomakerstohighprices.Themostsignificantchangeismajorsubstitutionfromhigh-nickelcathodechemistriestoLFP.IntheConstrainedChemistryCasefortheStatedPoliciesScenario,globaldemandfornickelisreducedby10%orabout440ktperyear,whilethedemandforcobaltisreducedby15%equivalentto35ktperyear.Thereductioninnickelissubstantialasitisalmosttwicethe2021totalproductionofnickelinRussia(theworld’slargestClass1nickelproducer).FortheAnnouncedPledgesScenario,thedemandreductionisevenmoresignificantwith15%totaldemandreductionfornickeland20%forcobalt.LithiumdemandwouldbeslightlyreducedintheConstrainedChemistryCase,withonlya3%reductioninboththeStatedPoliciesandAnnouncedPledgesScenariosmainlyduetoLFPhavingaslightlylowerlithiumintensityperkWhthanhigh-nickelchemistriessoitsmuchlargerdeploymentalsoreduceslithiumdemand.LNMOalsohaslowerlithiumintensitysoitsupportslithiumdemandreduction.TheintroductionofNa-ionby2030,beingtheonlychemistrythatdoesnotcontainlithium,notablydecreaseslithiumdemandwithonlyasmallshare.Therefore,intheshortterm,lithiumdemandcannotbesignificantlyreduced,thoughthereispotentialinthelongerterm.Light-dutyvehiclebatterychemistryprojections,ConstrainedChemistryandBasecases,2021and2030IEA.Allrightsreserved.Notes:Batterycathodechemistriesinclude:Na-ion=sodium-ion.LNMO=lithiumnickelmanganeseoxide.LMO=lithiummanganeseoxide.LFP=lithiumironphosphate.LNO=lithiumnickeloxide.LMR-NMC=lithium-manganese-richNMC.NMC=lithiumnickelmanganesecobaltoxide.NMC-highNiincludes:NMC811andNMC9.5.5.NMC-medNiincludes:NMC532,NMC622andNMC721.NMC-lowNiincludes:NMC333.NMCA=lithiumnickelmanganesecobaltaluminiumoxide.NCA=lithiumnickelcobaltaluminiumoxide.NCA+includes:NCA85,NCA90,NCA92andNCA95.TheBaseandConstrainedChemistrycasesrefertodifferentbatterychemistrysharesin2030.TheBaseCaseiswhatisexpectedtakingintoaccountoptimalallocationofchemistriestoappropriateuse-casesaswellasrecentpricemovements.TheConstrainedChemistryCasedepictstheconsequenceofaprolongedperiodofhighcommodityprices,coupledwithstrongreactionsbyautomakerstopricesignals.0%20%40%60%80%100%20212030Base2030ConstrainedCathodechemistryshare(%)Na-ionLNMOLMOLFPLNOLMR-NMCNMC-highNiNMC-medNiNMC-lowNiNMCANCA+GlobalsupplychainsofEVbatteriesPAGE57EVbatteriesandsupplychainsBatterymetaldemandreductioninConstrainedChemistryversusBasecasesIEA.Allrightsreserved.Notes:STEPS=StatedPoliciesScenario;APS=andAnnouncedPledgesScenario.ThepercentoftotalmetaldemandreductionintheConstrainedChemistryCaseisrelativetotheBaseCaseincludingEVandnon-EVdemand.Solid-statebatteriesAll-solid-statebatteries(ASSBs)aretheanticipatednextstep-changeimprovementinbatteryperformance.ASSBscanenabletheuseofalithiummetalanodewhichcanresultinbatteryenergydensitiesaround70%higherthanthecurrentbestLi-ionbatterieswithgraphiteanodes,dramaticallyimprovingdrivingrangecapability,openingotherapplicationsandeventuallydrivingdowncosts.TherehasbeenconsiderableactivityandindustryannouncementsforASSBsrecentlyfrombothstart-upsandestablishedbatterymakers.Forinstance,Nissanisstartingpilotproductionin2024andaimstoproduceEVswithASSBsin2028,havingjustopenedaprototypeproductionfacilityinKanagawa,Japan.QuantumscapeandVolkswagenhaveajointventurethatplansapilotproductionlinetostartin2024.SamsungSDIbeganconstructionofapilotsolid-statebatteryproductionlineinMarch2022,andaimstodevelopprototypecellsby2025andstartmassproductionin2027.Despitetheactivityandannouncements,majortechnicalchallengesremaintobesolvedbeforeASSBscanmakesignificantimpacts.Currentstate-of-the-artperformanceoftenreliesonimpracticalpressurestosolvethecontactproblem,oroncurrentlyunscalable,expensiveproductionprocessestoreachviableperformance.Thoughprogressisbeingmade,ASSBsarenotexpectedtohaveasignificantimpactuntilafter2030.LithiumNickelCobaltAPS-20%-15%-10%-5%0%LithiumNickelCobaltSTEPSMaterialdemandreductionfromBaseCase(%)GlobalsupplychainsofEVbatteriesPAGE58EVbatteriesandsupplychainsSupplyprojectionsappearsufficienttomeetmetaldemandintheStatedPoliciesScenario…Totaldemandandsupplyforlithium,nickelandcobalt,2020-2030IEA.Allrightsreserved.Notes:NZE=NetZeroEmissionsby2050Scenario;STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario.TheNZEbarrepresentsvariabilityindemandifdemand-sidemeasuresaretakentoreducebatteryandcriticalmetaldemand.Sources:IEAanalysisbasedonBenchmarkMineralIntelligenceforsupplycapacity.02000400060008000202020252030Nickel02505007501000202020252030ktLithiumSupplyNZEdemandSTEPSdemandAPSdemand02505007501000202020252030CobaltGlobalsupplychainsofEVbatteriesPAGE59EVbatteriesandsupplychains…butmoreinvestmentisrequiredfortheAnnouncedPoliciesandNetZeroby2050scenariosIncomparingmetalsupplyestimatesbyminingindustryexpertswiththeIEAdemandscenarios,itappearsthatEVbatterymetalsdemandintheStatedPoliciesScenariowilllikelybemetforallmetalsupto2025ifannouncednewsupplycomesonlineasscheduled.Whenlookingto2030,thesituationismoreuncertain,butacontinuationoftrendsshouldgenerallybesufficienttomeetdemandforallmetalsifallanticipatedsupplycomesonline,thoughwithasmallmargin.Nonetheless,thisstillrequiresasignificanteffort:dozensofminingprojectswillhavetoenterthemarketandreachcapacityonscheduleandtensofnewmineralprocessingandprecursorplantswillhavetobecommissioned.Also,inordertotranslatethisintoEVdeployment,tensofcathodeandanodeplants,gigafactoriesandEVproductionplantsarerequired.Demandforlithiumwillgreatlyexceedcurrentsupplyprojectionsby2030intheAnnouncedPledgesScenario.Tomeetclimateandzeroemissionstargets,additionalinvestmentswillhavetoflowintotheminingindustry.Lithiumrequiresa45%increaseindemandintheAnnouncedPledgesScenariocomparedtotheStatedPoliciesScenarioora33%increasefromprojectedsupplyin2030–roughly15additionalmineswouldberequiredontopofprojectedsupply.Fornickel,demandintheAnnouncedPledgesScenarioisjustoversupply,howeverthetotalprojectedsupplyincludesbothClass1and2nickelwhereasbatteriesrequireClass1orsignificantadditionalprocessingofClass2nickel.Therefore,significantinvestmentsareneeded.IntheConstrainedChemistryCase,thedemandforallmetalswilldecrease,inparticularfornickelandcobalt.NickeldemandintheAnnouncedPledgesScenariowouldbereducedtobethesameasintheStatedPoliciesScenarioin2030.Forcobalt,theAnnouncedPledgesScenariodemandismetbyprojectedsupply,buttheConstrainedChemistryCasewouldreducetheAnnouncedPledgesScenariodemandto22%belowsupplyestimates,aconsiderablesupplysurplus.Forlithium,thiswouldreducethegapbetweentheAnnouncedPledgesScenariodemandandprojectedsupplyby13%.Thoughthepriceofcobaltisrisingandthesupplyofcobaltishighlyconcentratedgeographicallyandthusmorevulnerabletosupplyshocks,itisexpectedthatinthelongtermcobaltsupplywilllikelynotbeasmuchofanissueaslithiumandnickel.Thisisduetothetrendofmovingawayfromcobaltincathodechemistries,coupledwiththeexpansionofrecyclingascobaltisthemostvaluablebatterymetalperkilogramme.Inthelongterm,recyclingwillcontributesignificantlytosupply.However,onlysmallcontributionsfromrecyclingareexpectedbyGlobalsupplychainsofEVbatteriesPAGE60EVbatteriesandsupplychains2030,particularlyforlithiumandnickel.FromanalysisofthedatesofexpectedretirementofEVfleetsandtheirbatterychemistrycompositions,thereislessthan1%oftotalprojecteddemand(inbothscenarios)availablefromrecyclingforlithiumandnickelby2030.Forcobaltthereisasmallcontributionavailablefromrecycling,expectedataround2%oftotal2030demandforbothscenarios.Secondarybatteryproductionfromrecyclingandre-use,2030IEA.Allrightsreserved.Notes:STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario.0%1%2%3%4%0510152025303540LithiumCobaltNickelLithiumCobaltNickelSTEPSAPSktReuseinsecond-lifebatteriesSecondaryproductionfromrecycledmineralsShareofrecycledmineralsintotaldemandGlobalsupplychainsofEVbatteriesPAGE61EVbatteriesandsupplychainsDemandsidemeasuressuchaslimitingthegrowthofbatterysizecanhelpbridgethegapMeasurestolowermetaldemandin2030intheNetZeroScenarioIEA.Allrightsreserved.Notes:NZE=NetZeroEmissionsby2050Scenario;STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario.Sources:IEAanalysisbasedonBenchmarkMineralIntelligenceforsupplycapacity.02004006008001000HighLowHighLowLithiumCobaltktNon-EVdemandSmallerBatteriesConstrainedChemistrySupplyin20300200040006000800010000HighLowNickelktGlobalsupplychainsofEVbatteriesPAGE62EVbatteriesandsupplychainsTheNetZeroEmissionsby2050pathwayrequiresmoresupplythancurrentlyplannedTheprojecteddemandforbatterymetalsintheNetZeroEmissionsby2050Scenario(NetZeroScenario)issignificantlyhigherthancurrentdemand.Demandinthisscenarioin2030isprojectedtoincreaseby30%peryearforlithium,11%fornickeland9%forcobalt.Bycomparison,supplyoflithiuminthepastfiveyearshasincreased6%peryear,nickelby5%andcobaltby8%.Therefore,meetingtheNetZeroScenariodemandforelectrificationrequireslargeinvestmentsinthesupplyofbatteryminerals–justasinallothercleanenergytechnologysectors.However,actionscanbetakentominimisedemandbyaddressingtwokeylevers:mineralintensityofbatteriesandaveragebatterysizepervehicle.Averagebatterysizesincreasedby60%between2015and2021.Thisreflectsbothincreasedaveragedrivingrangeandincreasedaverageenergyconsumption,asalargershareofelectriccarsareSUVs.Vehicleswithmorethan110kWhbatteriesarealreadybeingproduced.Inthecomingyears,ifcurrenttrendscontinue,weexpectbatterysizestocontinuetoincreasebyupto30%in2030.IntheNetZeroScenario,thistrendcouldbecurbedbyenactingpoliciesthatdiscouragevehicleswithextremelylargebatteries,forexamplebylinkingincentivestobatterysizesor,inthelongerterm,taxingEVswithlargebatteries.Ifby2030batterysizesremainedequaltotoday,16%ofincrementalbatterymetaldemandcouldbeavoided.InnovativebatterychemistriesintheNetZeroScenarioscenarioaredevelopedmorerapidly,followinganincreaseininvestmentforinnovation.Forexample,all-solid-statebatteriesareexpectedtoenterthemarketearlierthanintheStatedPoliciesScenario.IfinnovationfocussedonminimisingthematerialfootprintintheNetZeroScenario,byfollowingtheConstrainedChemistriescathodemix,demandforthekeybatterymetalswoulddecreasebyuptoone-third.Inaddition,theNetZeroScenarioinvestmentininnovationmayalsobringforwardnovelextractionandprocessingtechnologies,suchasDLE,cleanHPALandre-miningfromminingwaste,thatcanallcontributetoincreasingsupply.GlobalsupplychainsofEVbatteriesPAGE63EVbatteriesandsupplychainsInnovationcanhelpbridgethegapbetweendemandandsupplyofmetalsforbatteriesDirectlithiumextractioncanincreaseproductionfromexistingminesDirectlithiumextraction(DLE)isaprocesslargelyinthepilotstagetoday.Itbypassesthetime-intensiveneedtoevaporatetheunconcentratedbrinewaterandchemicalremovalofimpurities.Instead,DLEtechnologiesdirectlyextractlithiumfromunconcentratedbrineeitherthroughadsorption,ionexchangeorsolventextractiontechniques.DLEreliesonhighselectivitytechnologieswhichcanextractlithiumfromcomplexandvariedbrinesandrejectimpurities.Aswellasofferingcostandleadtimeadvantages,DLEhassustainabilityadvantagesandwidensthepoolofeconomicallyextractablelithiumsupply.Forexample,areasunsuitableforevaporationpondssuchaslithium-richgeothermalbrines,wherethereissignificantresource,suchastheSaltonSeainCalifornia.Environmentalimpactscanbeconsiderablyreducedcomparedtoconventionalhardrockminingandevaporativepondprocesses.Nevertheless,achievingrobustselectivityandscalingupDLEtechnologiesremainschallenging.Forexample,manyDLEtechnologiesmustbetunedtotheconditionsofthebrine.DLEisanemergingprocessyettobetestedatscale,however,severalcompaniesareleadinginthedevelopmentofDLEprojectssuchasPOSCO,StandardLithiumandVulcanEnergy.ThereareminingcompanieslookingtouseDLEaswellascompaniesdevelopingDLEtechnology,withanumberofjointventuresbeingformed.NovelnickelroutescanincreasethevarietyofsupplysourcesBatteriesrequireClass1nickel,typicallyfromsulphidedeposits.Mostproductiongrowthinthenearfuture,however,iscomingfromregionswithsignificantlateriteresources,whichproduceClass2nickel,suchasIndonesiaandthePhilippines.TherearenoveltechnologieswhichcanconvertlowgradelateriteresourcesintoClass1nickel.HPAL(high-pressureacidleaching)isaformofhydrometallurgythatusesacidseparationunderhightemperatureandpressuretoproducenickelatClass1gradesuitableforbatteryapplications.GlobalsupplychainsofEVbatteriesPAGE64EVbatteriesandsupplychainsHPALhowever,comeswithsignificantchallenges,predominantlyduetocostandleadtimes.CapitalcostsforHPALprojectstypicallyaredoublethatofconventionalsmeltersforoxideoreandtakeaboutfourtofiveyearstoreachcapacity.Recentprojectshavealsosufferedfrommajordelaysandcostoverruns.Nevertheless,projectsarecomingonlinewithChinaleadinginvestmentinHPALprojects,particularlyinIndonesia.Indonesia’sfirstHPALbatterynickelproject,ajointventurebetweenIndonesiancompanyHaritaGroupandChinesecompanyNingboLygendMiningCo.startedoperatingin2021.TherearealsoconcernswiththeenvironmentalimpactofHPALasitoftenusescoaloroil-firedboilersforheat,thusemittinguptothreetimesmoreGHGemissionsthanproductionfromsulphidedeposits.TherearecompaniesattemptingtomakeHPALmoresustainablesuchasCleanTeq,acompanydevelopingasolar-poweredHPALprojectinAustralia,wheresteamandheatarealsorecovered.Mixedhydroxideprecipitate(MHP)isbecomingincreasinglyimportantasanintermediateproductproducedfromlaterite,whichcanberefinedintonickelandcobaltsulphatesneededforbatteriesatlowcost.MHPcanalsobeprocessedintonickelandcobaltproductsfromselectiveacidleaching,aprocesswithalowerenvironmentalfootprint.MHP,oftenproducedfromHPAL,isbecominganimportantfeedstockovernickelmetalduetoitslowercostandtheexpectedincreaseinavailability.Anothermethodbeingexploredistheconversionofnickelpigiron(lowgrade3-12%nickel)intoanintermediategradenickelmatte(>50%concentration),aprecursortonickelsulphateusedforbatteries.Thiswouldsignificantlyincreasethepoolofpotentialnickelabletobeusedinbatteries,however,itisahighlyemissions-intensiveprocess(fourtimesmorethanHPAL)andmuchmorethanconventionalsulphideproduction.Tsingshan,themajorChinesesteelproducer,ispursuingthisprocessandmadeitsfirstshipmentin2022.TheeconomicsareuncertainwithanotherfacilityinNewCaledoniahavingclosedasitwastooexpensive.Tsingshanislookingtoutilisecleanenergyforitsoperationtoreducetheimpact,however,theprocessusesasignificantamountofdirectfuels,raisingintoquestionitsrealisablepotentialforreducingemissionsinlinewithothertechniques.Re-miningfromminingwasteRecoveryfromminingwaste,referedtoasre-mining,isanovelprocessofextractionofvaluablemineralsandmetalsfromminetailings,wastewaterandrock.Thisisapotentiallysignificantsourceofsupplythatsofarhasbeenunrealised.Forexample,tailingsfornickelandcopperminingwere4billiontonnesin2017.Thereareseveralstart-upsfocussingonthisincludingtheRioTintobackedstart-upRegeneration.IEA.Allrightsreserved.ThispublicationreflectstheviewsoftheIEASecretariatbutdoesnotnecessarilyreflectthoseofindividualIEAmembercountries.TheIEAmakesnorepresentationorwarranty,expressorimplied,inrespectofthepublication’scontents(includingitscompletenessoraccuracy)andshallnotberesponsibleforanyuseof,orrelianceon,thepublication.Unlessotherwiseindicated,allmaterialpresentedinfiguresandtablesisderivedfromIEAdataandanalysis.Thispublicationandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.IEAPublicationsInternationalEnergyAgencyWebsite:www.iea.orgContactinformation:www.iea.org/about/contactIEA.Allrightsreserved.TypesetinFrancebyIEA–July2022Coverdesign:IEA-Photo:@GettyImages

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