6 The Impacts of Electric Vehicles …
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NCA and LCO output. Based on the above data, the vulnerability index of material
x is calculated with Formula (6.2).
V x =
log 10 (α x ∗ β x + 1)
log 10 (α x ∗ β x + 1)
(6.2)
Finally, SRIL of material x in lithium battery production is calculated based
on supply disruption probability index HHI-WGI and vulnerability index V, with
Formula (6.3).
SRIL x = HHI_WGI x ∗ V x
(6.3)
6.3.3 Results of Supply Risk Analysis
Figure 6.7 illustrates the supply concentration of four critical materials of lithium
battery in varied stages. The higher HHI and HHI-WGI values, the more concentrated
the supply. Three stages are delineated for the supply chain of all four materials:
mining, refining and manufacturing. The figure shows that supply concentration
differs among various stages. From the perspective of HHI, the concentration of
lithium and cobalt features a steady increase from mining to refining and product
manufacturing; while a drop is detected for nickel and manganese. From the perspective of HHI-WGI, the supply risk differs considerably among different processing
stages. From upstream to downstream, HHI-WGI decreases for cobalt while increases
for lithium, nickel and manganese. HHI-WGI of cobalt exploitation and manganese
manufacturing is markedly higher than other stages. The results show that mining
should be the greatest concern for cobalt while higher risk in downstream processing
should be noticed for lithium, nickel and manganese.
Figure 6.8 reveals the SRIL value of all four materials in the supply chain. For
lithium battery industry, the relative magnitude of supply risk is consistent for the
four materials in three processing stages. Compared to other metals, cobalt is subject
to the greatest hidden supply risk, followed by lithium and manganese; while the
supply risk of nickel has always been the least significant. By the average SRIL
value, material supply risk peaks in the manufacturing stage, followed by refining
and mining. A horizontal comparison of supply risk of all materials in different stages
reveals the highest risk of cobalt in mining, refining and manufacturing, lithium in
refining and manufacturing, and manganese in manufacturing.
The significance of this study is to quantifiably identify the key stakeholder in
the supply chain of metal resources. Based on the above results, the corresponding
strategic plan can be deployed to mitigate material supply risk in lithium battery
industry. A systematic production capacity planning from multiple dimensions is
needed for stakeholders in the battery industry. Manufacturers tend to prioritize
production cost for the sake of maximum revenue; however, it should be recognized
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NCA and LCO output. Based on the above data, the vulnerability index of material
x is calculated with Formula (6.2).
V x =
log 10 (α x ∗ β x + 1)
log 10 (α x ∗ β x + 1)
(6.2)
Finally, SRIL of material x in lithium battery production is calculated based
on supply disruption probability index HHI-WGI and vulnerability index V, with
Formula (6.3).
SRIL x = HHI_WGI x ∗ V x
(6.3)
6.3.3 Results of Supply Risk Analysis
Figure 6.7 illustrates the supply concentration of four critical materials of lithium
battery in varied stages. The higher HHI and HHI-WGI values, the more concentrated
the supply. Three stages are delineated for the supply chain of all four materials:
mining, refining and manufacturing. The figure shows that supply concentration
differs among various stages. From the perspective of HHI, the concentration of
lithium and cobalt features a steady increase from mining to refining and product
manufacturing; while a drop is detected for nickel and manganese. From the perspective of HHI-WGI, the supply risk differs considerably among different processing
stages. From upstream to downstream, HHI-WGI decreases for cobalt while increases
for lithium, nickel and manganese. HHI-WGI of cobalt exploitation and manganese
manufacturing is markedly higher than other stages. The results show that mining
should be the greatest concern for cobalt while higher risk in downstream processing
should be noticed for lithium, nickel and manganese.
Figure 6.8 reveals the SRIL value of all four materials in the supply chain. For
lithium battery industry, the relative magnitude of supply risk is consistent for the
four materials in three processing stages. Compared to other metals, cobalt is subject
to the greatest hidden supply risk, followed by lithium and manganese; while the
supply risk of nickel has always been the least significant. By the average SRIL
value, material supply risk peaks in the manufacturing stage, followed by refining
and mining. A horizontal comparison of supply risk of all materials in different stages
reveals the highest risk of cobalt in mining, refining and manufacturing, lithium in
refining and manufacturing, and manganese in manufacturing.
The significance of this study is to quantifiably identify the key stakeholder in
the supply chain of metal resources. Based on the above results, the corresponding
strategic plan can be deployed to mitigate material supply risk in lithium battery
industry. A systematic production capacity planning from multiple dimensions is
needed for stakeholders in the battery industry. Manufacturers tend to prioritize
production cost for the sake of maximum revenue; however, it should be recognized