Electric vehicle supply chain

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The electric vehicle supply chain comprises the mining and refining of raw materials and the manufacturing processes that produce lithium ion batteries and other components for electric vehicles. The lithium-ion battery supply chain is a major component of the overall EV supply chain, and the battery accounts for 30–40% of the value of the vehicle. [1] Lithium, cobalt, graphite, nickel, and manganese are all critical minerals that are necessary for electric vehicle batteries. [2] There is rapidly growing demand for these materials because of growth in the electric vehicle market, which is driven largely by the proposed transition to renewable energy. Securing the supply chain for these materials is a major world economic issue. [3] Recycling and advancement in battery technology are proposed strategies to reduce demand for raw materials. Supply chain issues could create bottlenecks, increase costs of EVs and slow their uptake. [1] [4]

Contents

The battery supply chain faces many challenges. Deposits of critical minerals are concentrated in a small number of countries, mostly in the Global South. Mining these deposits presents dangers to nearby communities because of weak regulation, corruption, and environmental degradation. These communities face human rights violations, environmental justice issues, problems with child labour, and potentially generational legacies of contamination from mining activities. Manufacture of battery technology is largely dominated by China. However burning less petroleum products in vehicles can reduce the environmental impact of the petroleum industry because, as of 2023, most petroleum is used in vehicles. [5]

Background

International commitments reflected in the Paris Agreement have led to efforts toward a renewable energy transition as a strategy for climate change mitigation. Green capitalism and sustainable development approaches have informed policy in many countries of the Global North, resulting in rapid growth of the electric vehicle industry, and resulting demands for raw materials. [6]

Description

The battery supply chain includes:

Upstream activities include mining for required raw materials, which include critical materials such as cobalt, lithium, nickel, manganese, and graphite as well as other required minerals such as copper. [2] [7]

Midstream activities include refining and smelting of raw mineral ores with heat or chemical treatment to achieve the high-purity materials required for batteries, [2] [1] as well as the manufacture of cathodes and anodes for battery cells. [7]

Downstream activities include manufacturing of the batteries and end goods for the consumer. [2]

End of life activities include recycling or recovery of materials when possible. [2]

China dominates the electric car industry, accounting for three-quarters of global lithium-ion battery production. Most refining of lithium, cobalt, and graphite takes place in China. Japan and Korea host significant midstream cell manufacturing and downstream supply chain activities. Europe and the United States have a relatively small share of the supply chain. [1]

Upstream activities (mining and processing) largely take place in countries with extractivist economies such as Australia, Chile, and the Democratic Republic of the Congo. [1] [6]

Recycling of battery minerals is limited, but is expected to rise in the 2030s when there are more spent batteries. Increasing recycling would bring considerable social and environmental benefits. [8]

Growth

Mainstream projections for electric vehicle uptake assume that there will be more cars in the future. [9]

In 2021, 3.3 million EVs were sold in China, up 400% from 2019 and higher than the global sales in 2020. [1]

Other components

EVs have fewer parts than ICEs. On average, a motor for an electric car has about 20 moving parts, but a comparable ICE would have 200 or more. [4]

Some electric vehicles motors are permanent magnet motors that require rare-earth elements such as neodymium and dysprosium. Production of these materials is also dominated by China and poses environmental problems. An alternative motor is the AC induction motor, which does not use these minerals but requires additional copper. [4]

Electric vehicles require more semiconductors than internal combustion engines (ICEs). Taiwan is the world's largest producer of semiconductors. [4]

Challenges

Supply chain risks include sustainability challenges, [10] political instability and corruption in countries with mineral deposits, [11] and human rights or environmental justice concerns. [12] [2] The supply of critical minerals is concentrated in a few countries: for example, the Democratic Republic of the Congo produced 74% of the world's cobalt in 2022. [13] Extreme weather events, geopolitical issues, international trade regulation, consolidation of supply chain companies into a few large corporations, and rapidly changing technologies all present additional challenges to building a resilient supply chain. [2]

Ethical supply chains must address concerns about child labour, corruption, and environmental degradation. [11] Mining for critical minerals can threaten public health or human rights in communities affected by mining. [2] Child labour and lack of safety regulations frequently endanger mine workers. The environmental effects of mining these materials can pollute or deplete soil and water; and the effects can last for centuries. Human rights violations frequently go undetected. [2] Monitoring these issues is challenging, because battery minerals typically travel 80,000 kilometres (50,000 mi) from where they are extracted to downstream manufacturing facilities. [2]

Mineral extraction in the Global South for manufacturing of batteries and vehicles consumed in the Global North may replicate historical patterns of injustice and colonialism. [6]

However electric vehicles are better for the environment than fossil-fuelled vehicles. [14] [15] The supply chain for fossil-fuelled vehicles is mostly petroleum (for a typical car around 17 tonnes of gasoline [16] ), and can be complicated and obscure. [17] Burning less petroleum products in vehicles such as two-wheelers [18] can reduce the environmental impact of the petroleum industry because, as of 2023, most petroleum is used in vehicles. [5]

Critical Minerals

Cobalt, nickel and lithium have been identified as critical minerals, that impose resource availability limits on large-scale adoption of lithium-ion batteries. [19] These three elements are concentrated in only 12 countries, with Australia being the only country, that has all three.

Geographic distribution of critical minerals for Li-ion batteries. LiBs-Critical.png
Geographic distribution of critical minerals for Li-ion batteries.

It has been estimated, that battery recyling can provide up to 60% of market demand for the three critical elements. [20] The ulimate reduction of Ni and Co demand is expected from wider adoption of lithium ion manganese oxide battery and of lithium iron phosphate battery. The demand reduction for lithium, particularly in the stationary energy storage market, is expected after commercialization of vanadium redox flow batteries and of sodium-ion batteries.

Related Research Articles

<span class="mw-page-title-main">Hybrid vehicle</span> Vehicle using two or more power sources

A hybrid vehicle is one that uses two or more distinct types of power, such as submarines that use diesel when surfaced and batteries when submerged. Other means to store energy include pressurized fluid in hydraulic hybrids.

<span class="mw-page-title-main">Lithium-ion battery</span> Rechargeable battery type

A lithium-ion or Li-ion battery is a type of rechargeable battery that uses the reversible intercalation of Li+ ions into electronically conducting solids to store energy. In comparison with other commercial rechargeable batteries, Li-ion batteries are characterized by higher specific energy, higher energy density, higher energy efficiency, a longer cycle life, and a longer calendar life. Also noteworthy is a dramatic improvement in lithium-ion battery properties after their market introduction in 1991: within the next 30 years, their volumetric energy density increased threefold while their cost dropped tenfold.

<span class="mw-page-title-main">Electric vehicle</span> Vehicle propelled by one or more electric motors

An electric vehicle (EV) is a vehicle that uses one or more electric motors for propulsion. The vehicle can be powered by a collector system, with electricity from extravehicular sources, or can be powered autonomously by a battery or by converting fuel to electricity using a generator or fuel cells. EVs include road and rail vehicles, electric boats and underwater vessels, electric aircraft and electric spacecraft.

<span class="mw-page-title-main">Lithium iron phosphate battery</span> Type of rechargeable battery

The lithium iron phosphate battery or LFP battery is a type of lithium-ion battery using lithium iron phosphate as the cathode material, and a graphitic carbon electrode with a metallic backing as the anode. Because of their low cost, high safety, low toxicity, long cycle life and other factors, LFP batteries are finding a number of roles in vehicle use, utility-scale stationary applications, and backup power. LFP batteries are cobalt-free. As of September 2022, LFP type battery market share for EVs reached 31%, and of that, 68% was from Tesla and Chinese EV maker BYD production alone. Chinese manufacturers currently hold a near monopoly of LFP battery type production. With patents having started to expire in 2022 and the increased demand for cheaper EV batteries, LFP type production is expected to rise further and surpass lithium nickel manganese cobalt oxides (NMC) type batteries in 2028.

<span class="mw-page-title-main">Battery recycling</span> Process

Battery recycling is a recycling activity that aims to reduce the number of batteries being disposed as municipal solid waste. Batteries contain a number of heavy metals and toxic chemicals and disposing of them by the same process as regular household waste has raised concerns over soil contamination and water pollution. While reducing the amount of pollutants being released through disposal through the uses of landfill and incineration, battery recycling can facilitate the release of harmful materials from batteries to both the environment and the workers recycling batteries.

<span class="mw-page-title-main">Electric vehicle battery</span> Battery used to power the electric motors of a battery electric vehicle or hybrid electric vehicle

An electric vehicle battery is a rechargeable battery used to power the electric motors of a battery electric vehicle (BEV) or hybrid electric vehicle (HEV).

<span class="mw-page-title-main">Cobalt</span> Chemical element, symbol Co and atomic number 27

Cobalt is a chemical element; it has symbol Co and atomic number 27. As with nickel, cobalt is found in the Earth's crust only in a chemically combined form, save for small deposits found in alloys of natural meteoric iron. The free element, produced by reductive smelting, is a hard, lustrous, silvery metal.

The rare earth industry in China is a large industry. Rare earths are a group of elements on the periodic table with similar properties. Rare earth metals are used to manufacture everything from electric vehicles (EVs), wind turbines, consumer electronics and other clean energy technologies. The rare earths cause improved system performance when for example electric battery terminal LiMn2O4 cathodes are doped with them, and it is known that some EVs use lithium-ion batteries such as these. Tesla automobiles "currently uses an lithium-nickel-cobalt-aluminum (NCA) chemistry, while lithium-nickel-manganese-cobalt (NMC) chemistries are common across the rest of the EV industry." Vehicle "manufacturers are keen to reduce reliance on rare earths, which like cobalt, suffers from highly concentrated supply and unpredictable pricing, with China holding a virtual global monopoly in primary supply and processing." Leading battery manufacturer Samsung SDI uses this technology for its phone and portable computer batteries.

<span class="mw-page-title-main">Material criticality</span>

Material criticality is the determination of which materials that flow through an industry or economy are most important to the production process. It is a sub-category within the field of material flow analysis (MFA), which is a method to quantitatively analyze the flows of materials used for industrial production in an industry or economy. MFA is a useful tool to assess what impacts materials used in the industrial process have and how efficiently a given process uses them.

Since 2011 the European Commission has assessed every 3 years a list of Critical Raw Materials (CRMs) for the EU economy within its Raw Materials Initiative. To date, 14 CRMs were identified in 2011, 20 in 2014, 27 in 2017 and 30 in 2020. These materials are mainly used in energy transition and digital technologies. Then in March 2023 Commission President Ursula von der Leyen proposed the Critical Raw Materials Act, "for a regulation of the European Parliament and of the European Council establishing a framework for ensuring a secure and sustainable supply of critical raw materials". At the time, Europe depended on China for 98% of its rare-earth needs, 97% of its lithium supply and 93% of its magnesium supply.

<span class="mw-page-title-main">Health and environmental effects of battery electric cars</span>

Usage of electric cars damage people’s health and the environment less than similar sized internal combustion engine cars. While aspects of their production can induce similar, less or different environmental impacts, they produce little or no tailpipe emissions, and reduce dependence on petroleum, greenhouse gas emissions, and deaths from air pollution. Electric motors are significantly more efficient than internal combustion engines and thus, even accounting for typical power plant efficiencies and distribution losses, less energy is required to operate an electric vehicle. Manufacturing batteries for electric cars requires additional resources and energy, so they may have a larger environmental footprint in the production phase. Electric vehicles also generate different impacts in their operation and maintenance. Electric vehicles are typically heavier and could produce more tire and road dust air pollution, but their regenerative braking could reduce such particulate pollution from brakes. Electric vehicles are mechanically simpler, which reduces the use and disposal of engine oil.

Contemporary Amperex Technology Co., Limited, abbreviated as CATL, is a Chinese battery manufacturer and technology company founded in 2011 that specializes in the manufacturing of lithium-ion batteries for electric vehicles and energy storage systems, as well as battery management systems (BMS). It is the world leader in EV batteries, with a global market share of around 37% in 2023.

Huayou Cobalt Co., Ltd primarily operates as a supplier of cobalt and its associated products, such as cobalt tetroxide, cobalt oxide, cobalt carbonate, cobalt hydroxide, cobalt oxalate, cobalt sulfate, and cobalt monoxide. The company is headquartered in the Tongxiang Economic Development Zone of Zhejiang, China.

Simon David Moores is a British businessman and entrepreneur, specializing in the lithium ion battery and electric vehicle industry.

Benchmark Mineral Intelligence also known as Benchmark Minerals, founded by Simon Moores in 2014, is a London-based IOSCO-regulated Price Reporting Agency (PRA) and specialist information provider for the lithium ion battery to electric vehicle (EV) supply chain.

<span class="mw-page-title-main">Environmental impacts of lithium-ion batteries</span>

Lithium batteries are primary batteries that use lithium as an anode. This type of battery is also referred to as a lithium-ion battery and is most commonly used for electric vehicles and electronics. The first type of lithium battery was created by the British chemist M. Stanley Whittingham in the early 1970s and used titanium and lithium as the electrodes. Applications for this battery were limited by the high prices of titanium and the unpleasant scent that the reaction produced. Today's lithium-ion battery, modeled after the Whittingham attempt by Akira Yoshino, was first developed in 1985.

China produced more than 15 billion units of lithium-ion batteries in 2019, which accounts for 73% of the world’s 316 gigawatt-hours capacity. China is a major producer of both lithium batteries and electric vehicles, with favourable policies for manufacturers and consumers. Chinese-made lithium-ion batteries were exported mainly to Hong Kong, the United States, Germany, Korea, and Vietnam. One of the major drivers of the demand for lithium-ion batteries comes from the electric vehicle industry since lithium-ion batteries have high energy density for their weight. In the decade since 2008, the production of lithium batteries has tripled.

<span class="mw-page-title-main">Redwood Materials</span> Sustainable battery materials company

Redwood Materials, Inc. is an American company headquartered in Carson City, Nevada. The company aims to recycle lithium-ion batteries and produce battery materials for electromobility and electrical storage systems. Redwood Materials was reported to have a valuation of about $3.7 billion as of July 2021.

<span class="mw-page-title-main">Electra Battery Materials</span> Canadian multinational corporation

Electra Battery Materials Corporation is a Canadian multinational corporation engaged in mining and refining raw materials for electric batteries. Electra owns and operates the first fully permitted metallurgical refinery in North America for producing battery-grade cobalt and nickel sulfate. The company also owns the Iron Creek cobalt-copper deposit in Lemhi County, Idaho, US.

References

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  2. 1 2 3 4 5 6 7 8 9 10 Mills, Ryan (2023-03-08). "EV Batteries 101: Supply Chains". Rocky Mountain Institute . Retrieved 2023-04-17.
  3. ↑ Zeng, Anqi; Chen, Wu; Rasmussen, Kasper Dalgas; Zhu, Xuehong; Lundhaug, Maren; Müller, Daniel B.; Tan, Juan; Keiding, Jakob K.; Liu, Litao; Dai, Tao; Wang, Anjian; Liu, Gang (2022-03-15). "Battery technology and recycling alone will not save the electric mobility transition from future cobalt shortages". Nature Communications. 13 (1): 1341. doi:10.1038/s41467-022-29022-z. ISSN   2041-1723. PMC   8924274 . PMID   35292628.
  4. 1 2 3 4 Ziegler, Bart (12 November 2022). "Electric Vehicles Require Lots of Scarce Parts. Is the Supply Chain Up to It?". Wall Street Journal. Retrieved 2023-04-26.
  5. 1 2 "How electric vehicles are accelerating the end of the oil age".
  6. 1 2 3 Jerez, Bárbara; Garcés, Ingrid; Torres, Robinson (2021-05-01). "Lithium extractivism and water injustices in the Salar de Atacama, Chile: The colonial shadow of green electromobility". Political Geography. 87: 102382. doi:10.1016/j.polgeo.2021.102382. ISSN   0962-6298. S2CID   233539682.
  7. 1 2 "Electric Vehicle Battery Supply Chains: The Basics". www.nrdc.org. 7 July 2022. Retrieved 2023-04-17.
  8. ↑ "Reliable supply of minerals – The Role of Critical Minerals in Clean Energy Transitions – Analysis". IEA. Retrieved 2023-04-17.
  9. ↑ Henderson, Jason (2020-11-01). "EVs Are Not the Answer: A Mobility Justice Critique of Electric Vehicle Transitions". Annals of the American Association of Geographers. 110 (6): 1993–2010. doi:10.1080/24694452.2020.1744422. ISSN   2469-4452. S2CID   218917140.
  10. ↑ Rajaeifar, Mohammad Ali; Ghadimi, Pezhman; Raugei, Marco; Wu, Yufeng; Heidrich, Oliver (2022-05-01). "Challenges and recent developments in supply and value chains of electric vehicle batteries: A sustainability perspective". Resources, Conservation and Recycling. 180: 106144. doi:10.1016/j.resconrec.2021.106144. ISSN   0921-3449. S2CID   245834750.
  11. 1 2 Deberdt, Raphael; Billon, Philippe Le (2021-12-01). "Conflict minerals and battery materials supply chains: A mapping review of responsible sourcing initiatives". The Extractive Industries and Society. 8 (4): 100935. doi:10.1016/j.exis.2021.100935. ISSN   2214-790X. S2CID   236622724.
  12. ↑ "Promoting Electric Vehicles Can Pose Environmental Challenges | Modern Casting". www.moderncasting.com. Retrieved 2023-04-17.
  13. ↑ "How 'modern-day slavery' in the Congo powers the rechargeable battery economy". NPR. 2023.
  14. ↑ "Electric Vehicles | MIT Climate Portal". climate.mit.edu. Retrieved 2024-04-15.
  15. ↑ Evans, Simon (2023-10-24). "Factcheck: 21 misleading myths about electric vehicles". Carbon Brief. Retrieved 2024-04-15.
  16. ↑ "Batteries vs oil: A comparison of raw material needs". Transport & Environment. 2021-03-01. Retrieved 2024-04-15.
  17. ↑ "Natural Gas and Oil Supply Chains Explained". www.api.org. Retrieved 2024-04-15.
  18. ↑ "Electric scooters slashing oil demand four times faster than electric cars – report". Drive. 2024-01-05. Retrieved 2024-04-15.
  19. ↑ High concentration from resources to market heightens risk for power lithium-ion battery supply chains globally. 2023. Environmental Science and Pollution Research. 30/24, 65558-71. Y. Miao, L. Liu, K. Xu, J. Li. doi: 10.1007/s11356-023-27035-9.
  20. ↑ High concentration from resources to market heightens risk for power lithium-ion battery supply chains globally. 2023. Environmental Science and Pollution Research. 30/24, 65558-71. Y. Miao, L. Liu, K. Xu, J. Li. doi: 10.1007/s11356-023-27035-9.
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