The supply of the raw and refined materials needed for the manufacturing of lithium-ion batteries has become as strategic as oil supplies, changing the landscape for the automotive, energy and electronics industries and their supply chains globally.
Lithium-ion batteries enabled the consumer electronics industry to become portable and lightweight back in the 1990’s. Since 2010, lithium-ion batteries are enabling a whole new revolution in the transport and energy sectors, with governments, automakers, utilities, chemical companies ramping up investment plans to have a place in the clean transport and energy landscapes. To meet expected battery demand by the end of the decade, battery cell makers are constructing additional manufacturing capacity. Major battery producers plan to invest over US$150Bn in expanding manufacturing capacity over the next 10 years in China, the USA and Europe. This is expected to increase annual battery capacity to over 2TWh by the end of the decade, almost 1TWh more than in the previous Roskill 3rd Edition of the Lithium-ion Batteries report. To meet such production, the upstream supply chain is responding accordingly with new manufacturing plants dedicated to precursors, cathodes, anodes, separators and electrolytes, especially outside Asia.
With almost 80% of future car sales falling under jurisdictions with CO2 and fuel-efficiency regulations, the auto industry is undergoing a complete restructuring in both powertrain technology and manufacturing processes to accommodate EV (Electric Vehicle) manufacturing. Additional costs arising from the integration of lithium-ion batteries into the car powertrain are encouraging auto OEMs to build dedicated manufacturing platforms to reduce costs and improve ease of assembly. Additionally, governments are subsidizing new manufacturing facilities in Europe and the USA to prevent job losses in a rapidly evolving auto industry. Roskill’s 4th Edition of the Lithium-ion Batteries report covers auto OEM EV production plans by plant to help incumbents in the supply chain to plan future commercial relationships accordingly.
Lithium-ion batteries are a complicated assemblage of materials, with metal and mineral use highest in the active cathode material, active anode material, collectors and cell hardware parts. Chemicals and plastics are more intensively used in binders, solvents, electrolytes (salts and solutions) and separators. However, a whole new paradigm of electrolyte additives and cathode coatings are expected to become the key differentiators in the battery industry. They provide the stability required by new and complex cell chemistries demanded in automotive applications.
The increased size, capacity, power, longevity and safety requirements from automotive applications compared to other end-uses has resulted in a shift in the battery materials required, most notably in cathode materials. The increase demands on nickel-cobalt-aluminium (NCA) and nickel-cobalt-manganese (NCM) in automotive applications has seen chemistries shift to higher nickel ratios, such as NCM 6:2:2 and NCM 8:1:1, increasing energy density at the expense of some cycle life and increased cost for battery management systems. Similarly, anode materials have also evolved to maximise battery performance and longevity with increasing amounts of silicon doping.
As demand for lithium-ion batteries continues to grow, the strain placed upon the raw material supply chain is expected to be significant. The wide range of raw materials required including lithium, cobalt, nickel sulphate, copper, aluminium and graphite, and changes to supply chains are inevitable.
The 4th Edition of the Lithium-ion Batteries report draws upon Roskill’s more than 50 years of experience in analysing metal and mineral markets, including major battery raw material markets, along with our in-house automotive and lithium-ion battery models.