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H. Hao and X. Sun
a grim outlook in the sustainable supply of resources. However, in the LFP scenario,
such ratio for both metals is brought to a low level, meaning that demand for nickel
and cobalt is rather flexible and the challenge in the sustainable supply can be circumvented by a wise planning of technological options. The demand-reserve ratio for
manganese is low in all three scenarios; moreover, EVs are not major consumers of
manganese, which produces no constraint on EV market expansion.
It should be noted, however, that all the above analysis is based on the impact
of electrification of light-duty vehicles, with no assessment on resources demand
from the electrification of heavy-duty vehicles or sectors other than transportation.
As battery has become the main consumer of lithium and cobalt, the analysis in this
research could largely capture the future supply and demand of the resources. But the
massive application of nickel in stainless steel and other areas will generate complex
interactions with its application in EVs, which is not covered by this research, and
is thus a limitation.
6.3 Supply Risk Assessment
6.3.1 Meaning of Supply Risk
Since the beginning of the century, the next generation clean energy aiming at efficient
energy use while cutting GHG emissions has aroused public attention and has been on
a fast track of development. As one of the typical products of clean energy technology,
lithium battery is gaining increasing popularity due to better performance in power
intensity and service life since 1991 when Sony started its commercialization. First
applied in consumer electronics such as mobile phones and computers, lithium battery
quickly took over nickel-metal hydride battery and nickel-cadmium battery, and
became the biggest contributor to the commercialization of EVs. Now, lithium battery
represents the most commonly used electrochemical energy storage device in 3C
electronics, EVs and power grid, etc. The shipment of battery used in EVs has surged
from 1.08 GWh in 2011 to 106 GWh in 2018, nearly a 100 times within 8 years. It
is widely estimated that the continuous replacement of combustion engine vehicles
by EVs will trigger a spike in market demand for lithium battery by 10–20 times.
The precondition of the exponential growth of lithium battery consumption is a
stable upstream supply chain, especially that of the raw materials. Lithium battery is
composed of cathode materials, anode materials, separator and electrolyte, of which
cathode materials largely determine battery performance and account for the biggest
share in the cost. The core raw materials for producing lithium battery cathode include
lithium, cobalt, nickel and manganese.
Compared to conventional staple metal commodities (e.g.: iron and aluminum),
the supply of these materials faces multiple potential challenges such as oligopoly,
low recycling rate, policy instability, noticeable environmental and social risks. It is
estimated that 15–20% of cobalt mining in DRC comes from artisanal mining, often
H. Hao and X. Sun
a grim outlook in the sustainable supply of resources. However, in the LFP scenario,
such ratio for both metals is brought to a low level, meaning that demand for nickel
and cobalt is rather flexible and the challenge in the sustainable supply can be circumvented by a wise planning of technological options. The demand-reserve ratio for
manganese is low in all three scenarios; moreover, EVs are not major consumers of
manganese, which produces no constraint on EV market expansion.
It should be noted, however, that all the above analysis is based on the impact
of electrification of light-duty vehicles, with no assessment on resources demand
from the electrification of heavy-duty vehicles or sectors other than transportation.
As battery has become the main consumer of lithium and cobalt, the analysis in this
research could largely capture the future supply and demand of the resources. But the
massive application of nickel in stainless steel and other areas will generate complex
interactions with its application in EVs, which is not covered by this research, and
is thus a limitation.
6.3 Supply Risk Assessment
6.3.1 Meaning of Supply Risk
Since the beginning of the century, the next generation clean energy aiming at efficient
energy use while cutting GHG emissions has aroused public attention and has been on
a fast track of development. As one of the typical products of clean energy technology,
lithium battery is gaining increasing popularity due to better performance in power
intensity and service life since 1991 when Sony started its commercialization. First
applied in consumer electronics such as mobile phones and computers, lithium battery
quickly took over nickel-metal hydride battery and nickel-cadmium battery, and
became the biggest contributor to the commercialization of EVs. Now, lithium battery
represents the most commonly used electrochemical energy storage device in 3C
electronics, EVs and power grid, etc. The shipment of battery used in EVs has surged
from 1.08 GWh in 2011 to 106 GWh in 2018, nearly a 100 times within 8 years. It
is widely estimated that the continuous replacement of combustion engine vehicles
by EVs will trigger a spike in market demand for lithium battery by 10–20 times.
The precondition of the exponential growth of lithium battery consumption is a
stable upstream supply chain, especially that of the raw materials. Lithium battery is
composed of cathode materials, anode materials, separator and electrolyte, of which
cathode materials largely determine battery performance and account for the biggest
share in the cost. The core raw materials for producing lithium battery cathode include
lithium, cobalt, nickel and manganese.
Compared to conventional staple metal commodities (e.g.: iron and aluminum),
the supply of these materials faces multiple potential challenges such as oligopoly,
low recycling rate, policy instability, noticeable environmental and social risks. It is
estimated that 15–20% of cobalt mining in DRC comes from artisanal mining, often