Global Supply Chainsof EV Batteries

INTERNATIONAL ENERGY AGENCY
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ThailandGlobal supply chains of EV batteries

Executive summary

Executive Summary

Executive Summary

Global supply chains of EV batteries

As electric car sales continue to break records, supply chain considerations move to the fore
Today’s battery and minerals supply chains revolvearound China

Batteries typically accounts for 30% to 40% of the value of an electricvehicles (EV), and the race to net zero will focus attention on the
security of supply of the critical minerals and metals needed toChina produces three-quarters of all lithium-ion batteries and is home
to 70% of production capacity for cathodes and 85% for anodes (bothare key components of batteries). Over half of lithium, cobalt andgraphite processing and refining capacity is located in China. Europe
is responsible for over one-quarter of global EV assembly, but it ishome to very little of the supply chain apart from cobalt processing at
20%. The United States has an even smaller role in the global EV
battery supply chain, with only 10% of EV production and 7% ofbattery production capacity. Korea and Japan have considerable
shares of the supply chain downstream of raw material processing,particularly in the highly technical production of cathode and anodematerial. Korea is responsible for 15% of global cathode material
production capacity, while Japan accounts for 14% of cathode and
11% of anode material production. Korean and Japanese companies
are also involved in the production of other battery components suchas separators.

manufacture them.

Electric car sales continued to break records in 2021,
testing the resilience of battery supply chains
Few areas in the world of clean energy are as dynamic as EV
markets. In 2021, EV sales broke new records, with nearly 10% of
global car sales being electric, four times their market share in 2019.
Public and private spending on EVs doubled relative to 2020. Moreand more countries have pledged to phase out ICEs or haveambitious electrification targets. Five times more EV models wereavailable in 2021 relative to 2015, and most major carmakers areannouncing plans to further accelerate electrification of their fleets.
China accounted for half of the growth of the EV market in 2021. Morevehicles were sold in China in 2021 (3.3 million) than in the entire
world in 2020. Sales in Europe continued to grow robustly (up 65%
to 2.3 million) after the 2020 boom, and they increased in the UnitedStates as well (to 630 000) after two years of decline. The first quarterof 2022 showed similar sales trends.

Most key minerals are mined in resource-rich countries such as
Australia, Chile and the Democratic Republic of Congo, and handled
by a few major companies. Governments in Europe and the UnitedStates have bold public sector initiatives to develop domestic battery
supply chains, but the majority of the supply chain is likely to remain
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Executive Summary

Global supply chains of EV batteries

Chinese through 2030. For example, 70% of battery production

for other parts of the supply chain – in some cases requiring morethan a decade from initial feasibility studies to production, and thenseveral more years to reach nominal production capacity. Projectedmineral supply until the end of the 2020s is in line with the demandfor EV batteries in the Stated Policies Scenario (STEPS). But the
supply of some minerals such as lithium would need to rise by up to
one-third by 2030 to satisfy the pledges and announcements for EV
bateries in the APS. For example, demand for lithium – thecapacity announced for the period to 2030 is in China.

Battery and minerals supply chains will have to expand
ten-fold to meet government EV ambitions
The rapid increase in EV sales during the pandemic tested theresilience of battery supply chains, and Russia’s war in Ukraine has
further exacerbated matters with prices of raw materials such ascobalt, lithium and nickel surging. In May 2022, lithium prices werecommodity with the largest projected demand-supply gap – isprojected to increase sixfold to 500 kilotonnes by 2030 in the APS,
requiring the equivalent of 50 new average-sized mines.

more than seven times higher than in early 2021 due tounprecedented battery demand and a lack of sufficient investment in
new supply capacity. Meanwhile, Russia supplies 20% of global highpurity nickel. Average battery prices fell by 6% to USD 132 perkilowatt-hour in 2021, a slower decline than the 13% drop theprevious year. If metal prices in 2022 remain as high as in the firstquarter, battery packs would become 15% more expensive than they
were in 2021, all else being equal. However, the relative

There are other variables affecting demand for minerals. If current
high commodity prices endure, cathode chemistries could shift
towards less mineral-intensive options. For example, lithium iron
phosphate cathode chemistry (LFP) does not require nickel nor
cobalt, but comes with a lower energy density and is therefore better
suited for shorter-range vehicles. LFP share of global EV battery
supply has more than doubled since 2020 because of high mineralprices and technology innovation, primarily driven by an increasing
uptake in China. Innovation in new chemistries, such as manganeserich cathodes or even sodium-ion, could further reduce pressure on
mining. Recycling can also reduce demand for minerals. Although theimpact between now and 2030 is likely to be small, recycling’s
contribution to moderating mineral demand is critical after 2030. In
the Net Zero Emissions by 2050 Scenario (NZE), demand grows

competitiveness of EVs remains unaffected given the current oil priceenvironment.
Pressure on the supply of critical materials will continue to mount asroad transport electrification expands to meet net zero ambitions.
Demand for EV batteries will increase from around 340 GWh today,
to over 3500 GWh by 2030 in the Announced Pledges Scenario(APS). Cell components and their supply will also have to expand by
the same amount. Additional investments are needed in the shortterm, particularly in mining, where lead times are much longer than
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Executive Summary

Global supply chains of EV batteries

even faster, requiring additional demand-side measures andtechnology innovation. Today’s corporate and consumer preferrence
for large car models such as sports utility vehicles (SUVs), which
account for half of all electric models available globally and require

sharing. Governments should ensure traceability of key EV
components and monitor progress of ambitious environmental andsocial development goals at every stage of battery and EV supply
chains.

larger batteries to travel the same distances, is exerting additionalpressure.

Ensuring secure, resilient and sustainable EV supply
chains will be key to accelerating global uptake
Electrifying road transport requires a wide range of raw materials.
While all stages of the supply chain must scale up, extraction andprocessing are particularly critical due to long lead times.
Governments must leverage private investment in sustainable mining
and ensure clear and rapid permitting procedures to avoid potential
supply bottlenecks.
Innovation and alternative chemistries that require smaller quantities
of critical minerals, as well as extensive battery recycling, can easedemand pressure and avoid bottlenecks. Incentivising battery“rightsizing” and the adoption of smaller cars can also decreasedemand for critical metals.
Governments should strengthen cooperation between producer andconsumer countries to facilitate investment, promote environmentallyand socially sustainable practices, and encourage knowledge

PAGE | 4

Executive Summary

Global supply chains of EV batteries

China dominates the entire downstream EV battery supply chain
Geographical distribution of the global EV battery supply chain
MiningMaterial processing

Cell components

Battery cells

EVs

100%

75%

50%

25%

0%

Li

Ni

Co

Gr

Li

China

EuropeUnited States

Ni
Japan

Co
Korea

Gr

Cathode Anode

DRC

Australia

Indonesia

Battery production EV production
RussiaOther
IEA. All rights reserved.

Notes: Li = lithium; Ni = nickel; Co = cobalt; Gr = graphite; DRC = Democratic Republic of Congo. Geographical breakdown refers to the country where theproduction occurs. Mining is based on production data. Material processing is based on refining production capacity data. Cell component production is based oncathode and anode material production capacity data. Battery cell production is based on battery cell production capacity data. EV production is based on EV
production data. Although Indonesia produces around 40% of total nickel, little of this is currently used in the EV battery supply chain. The largest Class 1 batterygrade nickel producers are Russia, Canada and Australia.
Sources: IEA analysis based on: EV Volumes; US Geological Survey (2022); Benchmark Mineral Intelligence; Bloomberg NEF.

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EV batteries and supply chains

Global supply chains of EV batteries

Battery metal prices increased dramatically in early 2022, posing a significant challenge to the
EV industry
1 000

100

900

90

800

80

700

70

600

60

500

50

400

40

300

30

200

20

100

10

0
2015

2016
Lithium

2017

2018

2019

Cobalt2020
Nickel2021

2022

Battery price (indexed 2015 = 100)

Metal price (Indexed values 30 Jun 2015 =100)

Battery metals prices, 2015 – July 2022

0

Battery
IEA. All rights reserved.

Sources: IEA analysis based on S&P Global
Notes: Lithium prices are from June 2022. Cobalt and Nickel from July 2022

PAGE | 6

EV batteries and supply chains

Global supply chains of EV batteries

EV batteries and supply chains

PAGE | 7

EV batteries and supply chains

Global supply chains of EV batteries

Recent developments in batteries and critical materials

PAGE | 8

EV batteries and supply chains

Global supply chains of EV batteries

Global battery demand doubled in 2021, driven by electric car sales in China
350

Battery demand by region, 2015-2021

GWh per year

GWh per year

Battery demand by mode, 2015-2021

300
250

350
300
250

200

200

150

150

100

100

50

50

0

0

2015 2016 2017 2018 2019 2020 2021
PLDVs

Bus

2015 2016 2017 2018 2019 2020 2021
China

Other

EuropeUnited States

Other

IEA. All rights reserved.
Notes: GWh = gigawatt-hours; PLDVs = passenger light-duty vehicles; other includes medium- and heavy-duty trucks and two/three-wheelers. This analysis does notinclude conventional hybrid vehicles.
Sources: IEA analysis based on EV Volumes.

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EV batteries and supply chains

Global supply chains of EV batteries

High-nickel cathode battery chemistries remain dominant though lithium iron phosphate ismaking a comeback
100%
90%
80%
70%
60%
50%
40%

100%
90%
80%
70%
60%
50%
40%

30%

30%

20%

20%

10%

10%

0%

Lithium

LDV EV cathode sales share, 2017-2021
Battery capacity share (%)

Mineral content (%)

Mineral composition of different battery cathodes

Nickel0%

NMC333

NMC811

NCA85

LFP

CobaltManganese

Aluminium

Iron and phosphorous

2017
Low-nickel

2018

2019

2020

2021

High-nickel

LFP

Other

IEA. All rights reserved.
Notes: LDV = light-duty vehicle; LFP = lithium iron phosphate; NMC = lithium nickel manganese cobalt oxide; NCA = lithium nickel cobalt aluminium oxide.
Low-nickel includes: NMC333. High-nickel includes: NMC532, NMC622, NMC721, NMC811, NCA and NMCA. Cathode sales share is based on capacity.
Sources: IEA analysis based on EV Volumes.

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EV batteries and supply chains

Global supply chains of EV batteries

Battery demand for EVs doubled in 2021
Automotive
lithium-ion(Li-ion)battery
demandwas
340 gigawatt-hours (GWh) in 2021, more than twice the level of 2020.
This increase is driven by the increase in electric passenger carsEVs, consumer electronics, and stationary storage batteries over the
nameplate capacities of all battery plants, the global averageutilisation rate for battery factories was 43% of nameplate capacity in(registrations increased by 120%). The average battery capacity ofbattery electric vehicles (BEVs) was 55 kilowatt-hours (kWh) in 2021,
down from 56 kWh in 2020, whereas the average capacity increased
for plug-in hybrid electric vehicles to 14 kWh in 2021, up from 13 kWh

2021, up from 33% in 2020. The low global average utilisation rate is
explained by two primary factors. First, there was strategic early
investment in battery plant capacity to prepare for projected demand
growth. Second, some factories are still ramping up production
capacity to reach nameplate capacity, a process that can take fromthree to six years.

in 2020. Battery demand for other transport modes, including
medium- and heavy-duty trucks and two/three-wheelers, increasedby 65%. Average battery capacities for BEV light-duty vehicles

Nickel-based battery chemistries remain dominantchanged regionally, with increases of more than 10% occurring in
Korea and several European countries. 1
China experienced unprecedented growth and accounted for thelargest share of automotive battery demand, with almost 200 GWh of
battery demand in 2021, up 140% from 2020. Growth was also
impressive in the United States where demand more than doubled in
2021, albeit from a lower base. Europe’s demand growth was slightly
lower than last year, yet it still increased more than 70%.
The surge in battery demand was met in 2021 due to sufficient battery
factory capacity. The nameplate capacity of a factory is the intended
full-load sustained output of a facility. Calculated as total demand of
1 This report is an excerpt from the Global Electric Vehicle Outlook 2022

PAGE | 11

A key defining feature of batteries is their cathode chemistry, which
determines both the battery performance and its material demand.
For the automotive sector, three broad categories of cathodechemistry are most relevant today: lithium nickel manganese cobalt
oxide (NMC); lithium nickel cobalt aluminium oxide (NCA); and lithium
iron phosphate (LFP). NMC and NCA cathodes have become
increasingly dominant as they offer high energy density based onhigher nickel content in the cathode. Higher nickel content, however,requires more complex and controlled production processes. LFP isa lower cost and more stable chemistry, with lower risk of catchingfire and a longer cycle life. It typically only has 65 - 75% of the energyEV batteries and supply chains

Global supply chains of EV batteries

Battery cathode and anode material demandktdensity compared with a high-nickel NMC such as NMC811, although
recent technology innovations have significantly improved theirenergy density. NCA is used exclusively by Tesla.
Nickel-based chemistries, such as NMC and NCA, were dominant in
the electric car battery market in 2021 with 75% of cathode material
demand share due to their advantages for driving range. However,there has been a major resurgence of LFP over the last two years,
reaching an EV cathode material demand share of 25%, mainly
driven by the increased uptake of electric cars in China. LFP is stillused for most medium- and heavy-duty vehicle applications due to its
superior cycle life, which suits intensive usage and frequent charging,and the fact that most electric medium- and heavy-duty vehicles are
in China, where LFP is mainly used. The cost advantages for LFP in
China became more apparent recently as subsidies that favoured

500

250

0

Anode

2017

2018

Other cathode

2019

2020

Nickel-based cathode2021
LFP cathode

IEA. All rights reserved.
Notes: kt = kilotonnes; LFP = lithium iron phosphate. Nickel-based cathodeincludes: lithium nickel manganese cobalt oxide NMC333, NMC532, NMC622,
NMC721, NMC811; lithium nickel cobalt aluminium oxide (NCA) and lithium
nickel manganese cobalt aluminium oxide (NMCA).
Sources: IEA analysis based on EV Volumes.

high-nickel chemistries were phased out.
Cathode and anode demand surged alongside battery demand in
2021. Demand for cathode material reached 520 kilotonnes (kt),more than doubling from 2020. Demand for anode material also
doubled to reach 300 kt. The significantly higher material requirement
for cathode material is due to the much higher energy densities of thegraphite anodes in comparison to leading cathodes, thus requiring
less anode material per cell.

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EV batteries and supply chains

Global supply chains of EV batteries

Resurgence of LFP
Nickel-based chemistries retained dominance of the market in 2021
with 85% of EV battery demand. However, there has been a major

LFP production is mostly limited to China – the traditional main hub –for the LFP battery chemistry. One reason for this is LFP patents;

resurgence of LFP battery chemistries over the last two years with
15% of EV battery demand in 2021, doubling from 7% in 2020,
primarily driven by increasing uptake of LFP in electric cars in
China. LFP demand share in LDVs in China more than doubled fromthe research consortium owning the patents formed an agreementwith battery makers in China in which they would not be charged alicence fee for using LFP if only used in China. These patents andlicence fees are set to expire in 2022 making production and sales

11% in 2020 to 25% in 2021, despite the lower energy density of
LFP than high-nickel chemistries. Given high battery metal prices,
LFP has become more attractive as it contains no cobalt or nickel,
instead using low cost iron and phosphorous (though remaining
exposed to rising lithium prices). LFP relies on lithium carbonate
rather than hydroxide used for nickel-rich chemistries.

abroad more attractive. Another key reason is the early subsidies inthe LFP supply chain in China.

The cost advantages of LFP in a high commodity price market are
one reason for the resurgence. Another is the recent innovation ofcell-to-pack (CTP) technology, eliminating the need for modules tohouse cells in the battery pack, thereby reducing the dead weight in

LFP battery production is now planned in Europe and the UnitedStates to meet anticipated LFP demand for EVs in these regions.

the pack and improving the energy density of LFP batteries. CTP
technology was pioneered by BYD with the Blade battery and it
continues to be improved. CATL released their third-generation
CTP battery increasing the LFP pack energy density to around 85%
of a conventional NMC811 battery. CTP is also being applied tohigh-nickel chemistries to further improve their energy density.

LFP is now set to surge globally. Recently, major non-Chinese EV
manufacturers, such as Tesla and Volkswagen, announced moves
to LFP chemistries for entry-level high volume EV models. Almost
half of all Tesla EVs produced in the first-quarter of 2022 used LFP.

A surge in LFP poses a challenge for battery recycling as it is difficult
to make a profit recovering iron and phosphorous. Without valuable
metals such as nickel and cobalt, the value that can be recoveredfrom LFP batteries drops considerably from conventional recycling
methods and its economic viability is a concern. LFP appears torequire direct recycling to be profitable or will require regulatoryintervention, frameworks or alternative business models.

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EV batteries and supply chains

Global supply chains of EV batteries

Battery metal prices increased dramatically in early 2022, posing a significant challenge to the
EV industry
1 000

100

900

90

800

80

700

70

600

60

500

50

400

40

300

30

200

20

100

10

0
2015

2016
Lithium

2017

2018

2019

Cobalt2020
Nickel2021

2022

Battery price (indexed 2015 = 100)

Metal price (Indexed values 30 Jun 2015 =100)

Battery metals prices, 2015 – July 2022

0

Battery
IEA. All rights reserved.

Notes: Lithium prices are from June 2022. Cobalt and Nickel from July 2022
Sources: IEA analysis based on S&P Global.
PAGE | 14

EV batteries and supply chains

Global supply chains of EV batteries

Significant battery metal price increases in 2022 reflect concerns of tightening supply andunderinvestment
High battery demand has spurred significant increases in demand forkey metals used in their production. Between the start of 2021 andMay 2022 lithium prices increased more than sevenfold and cobalt
prices more than doubled. Nickel prices almost doubled over the

Cobalt prices are also up sharply in recent months, although they are
not yet at at the level experienced at its peak. This likely reflects lower
demand expectations due to low cobalt chemistries gaining battery
market share. Supply issues, such as disruptions in port operations
in South Africa caused by the pandemic and civil unrest also
contributed to the cobalt price increases.

same period reaching levels not seen for almost a decade.
The unprecedented battery metal price rises have been caused by a
combination of surging battery demand, increasing pressure on
supply chains and concerns around tightening supply. The supply
constraints have been driven by three trends: first, production
challenges caused by the pandemic; second, concerns around
Class 1 nickel supply from Russia; and third, structural
underinvestment in new supply capacity during the three years
preceding 2021 when metal prices were low. Some producers
delayed or even curtailed planned projects and expansions due tolow lithium prices. For example, the Australian mining company
Galaxy Resources reduced lithium mine production at its mostimportant mine by about 40% in 2019 as did other Australian lithium
mining companies. The last time there was a price surge in battery
metal prices was for lithium and cobalt in 2017 due to optimistic
expectations for growth in battery demand, before prices collapsed in

Number of drills

Quarterly drilling activity by commodity type, 2020-2021
60
Cobalt50
40Graphite30
Lithium20
100

Nickel

Q1

Q2

Q3

Q4

Q1

2020

Q2

Q3

Q4

2021

IEA. All rights reserved.
Sources: IEA analysis based on S&P Global.

In March 2022 the price of nickel reached record levels andexperienced highly volatile movement, causing the London Metal
Exchange to temporarily close trade for the commodity. This wasprimarily driven by a short squeeze by market players, but recent

2018. Lithium has reached unprecedented price levels today being
almost 200% higher than its previous peak.
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EV batteries and supply chains

Global supply chains of EV batteries

concerns about the supply of nickel from Russia due to its invasionof Ukraine has also fuelled price rises. Russia is the world’s largest
producer of battery-grade (Class 1) nickel.

increase in adoption, over nickel-rich chemistries. Second,commodity prices were relatively low for the first half of 2021 which
helped the average price decline. Third, the use of higher nickel
chemistries such as NMC811 reduced the use of cobalt, the mostPrice increases are usually followed by expansion in supply with newmines or life extension of existing ones. Drilling activity is an indicatorof exploration in the mining sector. Since battery metal commodity

expensive metal constituent in batteries per kilogramme (kg) (cobalt
is around 5% of NMC811 cell price based on 2021 average price),
also offsetting some costs, particularly in the first half of 2021.

prices have begun to rise, so have drill counts (from 2020 to 2021,+50% for nickel and a threefold increase for lithium). High prices may
therefore be a long-term benefit for future battery metals supply,
stimulating significant supply investment to compensate for the

However, a key reason is the impact of rising commodity prices has
yet to fully materialise. Automakers increasingly use contracts inwhich material costs are linked with commodity prices for high volume
battery orders, though, there is a time lag. Therefore, these
automakers did not feel the result of the exceptional commodity pricerises from the last three months of 2021 until the first-quarter of 2022.

underinvestment during the years of low commodity prices.

Batteries have yet to experience the full impact ofcommodity price surges

If metal prices were to remain at levels experienced in the first threemonths of 2022 throughout the rest of the year, then we estimate thatbattery pack prices might increase by up to 15% from the 2021
weighted average price, all else being equal. The impact is likely to
be mitigated by OEMs substituting other more cost-effective
chemistries, but these price increases nonetheless will pose major
challenges for automakers, increasing battery costs, decreasing

Despite the recent commodity price surge, battery prices still declined
in 2021 with BNEF’s annual battery price survey recording a salesweighted average price of USD 132/kWh, a 6% decrease from 2020.
Although this represents a significant reduction from the 13%
decrease from 2019 to 2020, there are several factors that partiallyinsulated the average battery price from the commodity price rises
last year. First, the rising prices incentivised chemistry substitutions.
Many automakers switched to lower cost cathode chemistries withless commodity price exposure, such as LFP, which saw a significant

manufacturer margins and raising costs for consumers.

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EV batteries and supply chains

Global supply chains of EV batteries

EV batteries are the main demand driver for lithium demand, but their importance is also rapidly
rising for cobalt and nickel
Battery metals demand, 2017 - 2021

80

180
160

70

140

60

120

50

100

40

80

30

60

20

40

10

20

0

2017 2018 2019 2020 2021
EV demand

Other batteries

kt Ni

kt Co

kt Li

90

NickelCobaltLithium

0

3 000
2 500
2 000
1 500
1 000
500

2017 2018 2019 2020 2021

Ceramics and glass

Other

Metals02017 2018 2019 2020 2021

Class 2 demand

Class 1 non-EV demand

IEA. All rights reserved
Notes: Class 1 nickel (>99.8%) is suitable for use in batteries and Class 2 nickel (<99.8%) is not applicable for use in batteries without significant further processing.
Other batteries includes: batteries for stationary storage and consumer electronics.
Sources: IEA analysis based on EV Volumes and S&P Global.
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EV batteries and supply chains

Global supply chains of EV batteries

Critical metal demand and prices are increasingly driven by batteries
The three most critical metals for Li-ion batteries are lithium, cobalt
and nickel. All three metals are abundant in the earth’s crust,
however, supply depends on mine production capacity. The

to higher nickel content chemistries to achieve higher energy
densities and lower costs (cobalt is the most expensive constituent
per kg of Li-ion battery metal). The additional concerns of humanrights abuses and child labour related to cobalt mining in the
Democratic Republic of Congo (DRC) have also motivated battery
makers to move away from cobalt-intensive chemistries.

exceptional rise in demand for batteries is now outstripping supply,with new mines not being built fast enough.

Lithium

NickelLithium demand has almost doubled since 2017 to 80 kt in 2021, of
which demand for EV batteries accounts for 47%, up from 36% in2020 and only 20% in 2017. Lithium is also used in the production ofceramics, glass and lubricants. Batteries are now the dominant driverof demand for lithium and therefore set the price. The availability oflithium supply is of particular concern because it is irreplaceable for
Li-ion batteries and there are no commercial alternative battery
chemistries available at scale today that meet the performance of Liion batteries. Alternative lithium-free chemistries, however, aremaking progress, for instance, with Na-ion being commerciallyintroduced by CATL in 2021.

Nickel demand is dominated by stainless steel production. Total
demand was 2 640 kt in 2021, of which the share of EV-related
demand was 7%, up from 4% in 2020. Batteries requireClass 1 nickel (>99.8% purity), while Class 2 nickel (<99.8% purity)cannot be used without further significant processing. Nickel-based
cathodes are the dominant EV battery chemistries today and are
expected to remain so in the future due to the demand for longer
driving range EVs particularly in Europe and the United States. Thereis almost seven times more nickel than lithium by weight in an
NMC811 battery, therefore, EV Li-ion battery prices are mostsensitive to nickel prices. This is of significant current concern given
the war in Ukraine because Russia is the world’s largest supplier of

CobaltCobalt demand was 170 kt in 2021, of which the EV battery share
was 24%, up from 18% in 2020. Cobalt is also used in superalloys,
hard metals and catalysts. The cobalt intensity of Li-ion batteries has
decreased significantly over recent years as battery makers moved

Class 1 battery-grade nickel, producing around 20% of global supply.

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EV batteries and supply chains

Global supply chains of EV batteries

Making batteries for EVs requires several stages
EV battery supply chain

IEA. All rights reserved.

PAGE | 19

EV batteries and supply chains

Global supply chains of EV batteries

Production in all stages of the EV battery supply chain is concentrated in few companies
Share of total production of top-three companies at each stage of the EV battery supply chain, 2021

MiningCell Components

Battery cells

EVs

Ni

Cathode AnodeBattery production

EV production

100%

75%

50%

25%

0%

Li

IEA. All rights reserved.
Notes: The figure shows production percentages of top-three companies for 2021: EV production by sales; battery production by MWh produced; cathode and anodeby production capacity; mining by production capacity. Top-three companies by production (country where headquartered): lithium - Sociedad Química y Minera deChile (Chile); Pilbara Minerals (Australia); Allkem (Australia); nickel - Jinchuan Group (China); BHP Group (Australia); Vale SA (Brazil); cathode - Sumitomo (Japan);
Tianjin B&M Science and Technology (China); Shenzhen Dynanonic (China); anode - Ningbo Shanshan (China); BTR New Energy Materials (China); Shanghai
Putailai New Energy Technology (China); battery production - CATL (China); LG Energy Solution (Korea); Panasonic (Japan); EV production - Tesla (United States);VW Group (Germany); and BYD (China).
Sources: IEA analysis based on Benchmark Mineral Intelligence; Bloomberg NEF; S&P Global.

PAGE | 20

EV batteries and supply chains

Global supply chains of EV batteries

EV battery supply chains
EV battery supply chains consist of multiple complex stages that are
spread around the world. From extracting the necessary mineralores, refining to form sufficient purity chemicals, then advancedin Australia. Novel processes are being developed to extract lithiumfrom unconventional resources such as geothermal brine. Currently,
the top-five lithium suppliers account for about half of global lithiumproduction. Major lithium suppliers include a mixture of large
chemical and mining companies including: Sociedad Química y
Minera de Chile SA (Chile); Pilbara Minerals (Australia); Allkem(Australia); Livent Corporation (United States); and Ganfeng Lithium

materials synthesis to form cathode and anode materials. Similarcomplex supply chains characterise other battery components suchas electrolytes and separators. Cells are then fabricated and housedin modules within a battery pack which is integrated into the EV. To

Co. (China). Unlike for other battery metals, lithium extraction
companies tend to be specialised in lithium mining and chemicalcompanies.

understand current trends and future prospects of EVs, it is critical tounderstand all of the stages in this complex supply chain.

MiningNickel is found primarily in two types of deposit – sulphide andlaterite. Sulphide deposits are mainly located in Russia, Canada andAustralia and tend to contain higher grade nickel. It is more easily
processed into Class 1 battery-grade nickel. Laterite, however, tends
to contain lower grade nickel and is mainly found in Indonesia,
Philippines and New Caledonia. Laterite requires additional energy
intensive processing to become battery-grade nickel. Nickel
production is less concentrated than lithium with about ninecompanies supplying half of global nickel production. Key nickel

The five key battery materials are lithium, nickel, cobalt, graphite andmanganese. 2 Lithium is extracted from two very different sources:brine or hard rock. Lithium brines are concentrated salt watercontaining high lithium contents and are typically located in the highelevation areas of Bolivia, Argentina and Chile in South America with
Chile being the largest producer. Brine deposits often contain large
quantities of other useful elements such as sodium, potassium,magnesium and boron which offsets some of the cost of pumping andprocessing brine. Lithium hard rock (spodumene) is primarily mined

The battery metals focused on for this analysis are lithium, nickel and cobalt. For analysis of othercritical minerals, see IEA’s The Role of Critical Minerals in Clean Energy Transitions report.

2

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EV batteries and supply chains

Global supply chains of EV batteries

suppliers include: Jinchuan Group (China); BHP Group (Australia);
Vale SA (Brazil); Tsingshan (China); Nickel Asia Corporation(Philippines); and Glencore (Switzerland).

typically involve heavy industrial processes based on heat or
chemical treatment (typically pyrometallurgy and/or hydrometallurgy)
to refine the raw ore into the usual required chemicals, lithium
carbonate or hydroxide, or cobalt and nickel sulphate. Adding
complexity, certain raw materials are more or only suitable for the
production of battery precursors. For instance, lithium carbonate is
produced from lithium brine, which is useful for wider lithium demand,
however, unsuitable for use in leading high-nickel Li-ion batteries.
Lithium hydroxide is more suitable for high-nickel chemistries and ismore easily produced from spodumene hard rock sources. Similarly,
battery production typically requires nickel sulphate, typically only
synthesised from Class 1 nickel, which is most economically
produced from nickel sulphides. Class 2 nickel can be processed into
Class 1 nickel but requires significant additional processing.

Cobalt is predominantly mined as a by-product of copper or nickel
mining. Over 70% of cobalt is produced in the Democratic Republicof Congo (DRC) and Glencore (Switzerland) is the largest global
producer. Other key cobalt suppliers include: Jinchuan Group(China); CN Molybdenum (China); and Chemaf (DRC). Artisanal andsmall-scale mining is responsible for 10 – 20% of cobalt productionin the DRC.
Graphite is the dominant anode material and can be found naturally
or produced synthetically. Natural graphite mining is dominated by
China (80%), though global production is becoming more diversified,with many greenfield graphite mining projects being developed
including in Tanzania, Mozambique, Canada and Madagascar.

New processing technologies, however, are increasing the flexibilityof nickel processing routes. These include:

Manganese resources are more widely distributed around the world
than the other battery metals and remain available at relatively low
cost. There is a general expectation that there will not be an ore
shortage in the near term. The leading producers of manganese ore•

High-pressure acid leaching (HPAL) is a process which is able
to produce Class 1 nickel from lower grade laterite resources.

•

Mixed hydroxide precipitate (MHP), an intermediate product innickel refining, can be further be refined into nickel sulphates
at low cost from laterite resources.

•

Nickel matte (a battery-grade nickel precursor) can beproduced from laterite resources, but is more emissionsintensive than conventional production routes.

include South Africa, Australia, Gabon and China.

Raw material processing
Batteries require high purity materials and therefore high-grade
sources, as well as significant refining, is required to reach sufficientquality battery chemical precursors. These refining processes
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EV batteries and supply chains

Global supply chains of EV batteries

Raw material processing is highly concentrated. For example, inlithium carbonate and hydroxide production, five major companies
are responsible for three-quarters of global production capacity.
Often the refining is done by the mining company together with theextraction. For example, Ganfeng, a Chinese mining company, has
evolved to include processing and refining lithium and is increasingly
focussed on boosting their lithium hydroxide production. In othercases, it is exported to third parties to do the refining, with many
processing companies in China, such as Chengxin Lithium Group or
Zhejiang Huayou Cobalt. This is particularly the case for Australian
spodumene as almost no miners yet produce integrated lithium

required to form the battery active materials from the high purity
chemicals produced from raw material processing, such as lithiumhydroxide and nickel sulphate. These materials are further processedusing specialised syntheses to produce active materials for thechemical supply.

(China); and Ningbo Shanshan (China).

While manganese resources are widely distributed, production ofhigh-purity manganese sulphate raises concerns aroundgeographical concentration of supply. China currently accounts foraround 90% of the global production capacity, raising the need for
new, diversified manganese refining capacity. New manganesesulphate projects are starting to come online in Australia, Europe,

The dominant anode active material is graphite which can be naturalor synthetic. Producing graphite anode materials is more mature andestablished than cathode material production given graphite has
been the dominant anode for a long time, though both graphite types
require sophisticated processing. Flake natural graphite is used inbatteries and is processed into spherical graphite to be morehomogenous for use as anode material. Synthetic graphite is
produced from refining hydrocarbon materials such as coke. To
improve graphite anode performance, small and increasing fractionsof silicon are being added to the graphite anode to increase energy
density. Anode material production is even more highly concentrated
with four companies responsible for half of global production
capacity. The largest players include: Ningbo Shanshan (China);

cathode and anode. The leading cathode active materials for Li-ion
are transition metal oxides including lithium cobalt oxide, lithium
nickel manganese cobalt oxide (NMC), lithium nickel cobalt
aluminium oxide (NCA) and lithium iron phosphate (LFP). Sevencompanies are responsible for 55% of global cathode material
production capacity. Key players include: Sumitomo (Japan); Tianjin
B&M Science and Technology (China); Shenzhen Dynanonic

Indonesia and United States.

Cell component production
Batteries are comprised of several highly specialised components
including cathode and anode materials, electrolytes and separators.
These components require advanced materials chemistry andengineering for their production. The most complex processing is

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EV batteries and supply chains

Global supply chains of EV batteries

BTR New Energy Materials (China); and Shanghai Putailai New
Energy Technology (China). The top-six companies are all Chinese
and account for two-thirds of global production capacity.

in highly controlled clean and dry room conditions to avoid any
impurities and moisture. Using low-carbon sources of electricity is key
to reducing emissions in cell production. First electrodes areproduced by mixing cathode or anode active materials with a binder,
solvent and additives before coating on aluminium (cathode) or
copper (anode) foil current collectors. The electrodes are rolled(calendared) and subsequently dried. The cell is then created bystacking the electrodes with a separator in between.

Separators are engineered microporous membranes, typically madeof polyethylene or polypropylene and often ceramic coated for
improved safety for EVs. Separator production is also concentrated
with five companies responsible for half of the global production
capacity. Key players include: Zhuhai Enjie New Material Technology(China); Shanghai Putailai New Energy Technology (China); and SK
IE Technology (Korea). Electrolytes are made of a salt and solvent
and both require synthesis and then mixing. Jiangxi Tinci Central
Advanced Materials in China alone produces 35% of global
electrolyte salt. The top electrolyte producing companies include:
Zhangjiagang Guotai-Huarong New Chemical Materials (China);
Shenzhen Capchem Technology (China); and Ningbo Shanshan(China). Most companies that engage in cell component
manufacturing are highly specialised and only produce thosecomponents.

Manufacture of the battery pack may be completed either by the cellmanufacturer or by the automaker. Cells are first housed together inmodule frames, then the battery pack is assembled throughintegration of modules, the battery management system, electronics
and sensors, all encased in a final housing structure.
Battery cell production is a capital-intensive process and production
is highly concentrated, with the top-three producers in 2021, CATL
(China), LG Energy Solution (Korea), and Panasonic (Japan),accounting for 65% of global production. Cell manufacturers fromJapan and Korea tend to be established conglomerates having
decades of experience making batteries for consumer electronics.
There are also Chinese companies that began producing batteries
for consumer electronics in the 1990s and then specialised inbatteries for EVs such as CATL and BYD. A third wave of new battery
makers is taking shape in Europe and North America, but today they
are mostly in planning or upscaling stages. With recent supply chain
strains many battery and automakers are becoming increasingly

Battery cell and pack production
Producing the battery cells is a multi-step process with two broadstages: electrode manufacturing and cell fabrication. Though cellmanufacturers have different cells designs, the cell manufacturing
processes are similar, use mature technologies and are wellestablished. These processes are energy intensive, being conducted

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EV batteries and supply chains

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involved in the mining and processing of critical minerals to ensure
access to production; Tesla, CATL and LG Energy Solution have all
become directly involved in upstream stages.

the module/cells, and repackaging into new packs for new
applications. The primary drivers of cost of refurbishing batteries are
the logistics involved in their collection, testing of remaining usefullife, and the physical disassembly and repacking of cells/packs. Reuse, however, faces economic and regulatory challenges including
ensuring reliable grading of cells/packs, liability and ensuring the cost

EV production
The battery pack is integrated into the EV by the automakers, where
it is connected with the electric motor, on-board charge module, highvoltage distribution box, electric transmission and thermal systems,of repurposing is competitive with new batteries.

Recyclingdepending on the vehicle architecture. Automakers focussing only on
EVs must develop greenfield factories, while for incumbent
automakers pre-existing vehicle assembly factories can be retooled
and repurposed for EV production. EV manufacturing is currently
concentrated in a small number of OEMs, with the top-six companies
responsible for 52% of production in 2021. This is a slight decrease
from 2020 where the top-six were responsible for 55%. The threelargest producers, Tesla (United States), VW Group (Germany) and

There are three primary methods for Li-ion battery recycling:
pyrometallurgy, hydrometallurgy and direct recycling. Pyrometallurgy
involves smelting the battery in a high temperature oven, recovering
only a fraction of metals from the cathode. Hydrometallurgy involvesa chemical leaching process to precipitate out individual metals.
Currently, most battery recycling uses a combination ofpyrometallurgy and hydrometallurgy as they are well suited to apoorly sorted feedstock of cells. These methods rely on reclaiming
the expensive metals specifically nickel and cobalt, and often thecopper and aluminium. Current global capacity for battery recycling
is around 200 kt/year with China accounting for about half. This
dominant position is expected to be retained due to announced
additional capacity. Most battery recycling companies are
independent recyclers, but OEMs, battery manufacturers, miners andprocessors are starting to enter the market.

BYD (China), accounted for a third of EV production in 2021. The
rapid growth of BYD has been particularly impressive, it was not evenamong the top-six producers in 2020, but ranked as the third-largest
producer of EVs in 2021.

Re-useRe-use or repurposing involves refurbishing EV batteries for lessdemanding second-life applications, typically in stationary storage.
Spent EV batteries typically still have around 80% of their usable
capacity, therefore, repurposing generates additional value fromthese batteries. Re-use requires disassembly of the pack, testing of

Direct recycling is an emerging process, offering improved recycling
efficiency, as it does not break down the cathode into elements, but
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EV batteries and supply chains

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instead retains the material crystal structure and regenerates thecathode material. This retains the embedded energy and economic
value in cathode processing, avoiding the need to resynthesise fromraw materials. It is well suited to cathodes containing little valuable
metals such as LFP. However, it is limited by its inflexibility as it must
be tailored to each cathode chemistry, and recovered cathodes canonly be input into production of the same battery type. Though, newprocessing methods are under development to convert recycled
chemistries into current chemistries e.g., NMC333 to NMC811.
Policy mandates, for instance, extended producer responsibility forbattery recycling, are spurring the formation of joint ventures among
OEMs, re-use and recycling companies. For instance, SK Innovation
and Kia are developing both re-use and recycling initiatives; Kia
evaluates used batteries and repackages ones suitable for re-use instationary storage and the rest are sent to SK Innovation’s recycling
process for material recovery. Renault, Veolia and Solvay haveformed a consortium for the same purpose. BMW, Umicore andNorthvolt have also formed a consortium to create a closed-loop forbattery cells, involving both re-use and recycling.

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EV batteries and supply chains

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China dominates the entire downstream EV battery supply chain
Geographical distribution of the global EV battery supply chain
MiningMaterial processing

Cell components

Battery cells

EVs

100%

75%

50%

25%

0%

Li

Ni

Co

Gr

Li

China

EuropeUnited States

Ni
Japan

Co
Korea

Gr

Cathode Anode

DRC

Australia

Indonesia

Battery production EV production
RussiaOther
IEA. All rights reserved.

Notes: Li = lithium; Ni = nickel; Co = cobalt; Gr = graphite; DRC = Democratic Republic of Congo. Geographical breakdown refers to the country where theproduction occurs. Mining is based on production data. Material processing is based on refining production capacity data. Cell component production is based oncathode and anode material production capacity data. Battery cell production is based on battery cell production capacity data. EV production is based on EV
production data. Although Indonesia produces around 40% of total nickel, little of this is currently used in the EV battery supply chain. The largest Class 1 batterygrade nickel producers are Russia, Canada and Australia.
Sources: IEA analysis based on: EV Volumes; US Geological Survey (2022); Benchmark Mineral Intelligence; Bloomberg NEF.

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EV batteries and supply chains

Global supply chains of EV batteries

There are areas of unrealised potential for diversifying battery metal extraction
Current mining production versus reserves for battery materials

100%

75%

50%

25%

0%

Production

Reserves

Production

Lithium
China

EuropeUnited States

Reserves

Production

NickelDRC

Australia

Reserves

CobaltIndonesia

Chile

Production

Reserves

Graphite
BrazilEast Africa

RussiaOther
IEA. All rights reserved.

Notes: Li = lithium; Ni = nickel; Co = cobalt; Gr = graphite; DRC = Democratic Republic of Congo. Reserves refer to economically extractable resource as definedand determined by the US Geological Survey.
Sources: IEA analysis based on US Geological Survey (2022).
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EV batteries and supply chains

Global supply chains of EV batteries

China dominates the entire downstream EV battery supply chain, but investments are underway
worldwide
China dominates production at every stage of the EV battery supply
chain downstream of mining.Three-quarters of battery cell production
capacity is in China, with the same for the specialised cathode andanode material production, for which China accounts for 70% of
cathode and 85% of anode material global production capacity. Over
half of global raw material processing for lithium, cobalt and graphite

is produced in the DRC. Nickel supply is slightly more diverse;
Indonesia has the largest share of production with almost 40% of totalalso occurs in China. With 80% of global graphite mining, China
dominates the entire graphite anode supply chain end-to-end. Europe
is responsible for over a quarter of EV production, but holds very little

20% of the global supply.

nickel supply, yet today little of it is used in the EV battery supply
chain as it mostly produces Class 2 nickel. Not only is Russia theworld’s third-largest producer of nickel, more significantly, it is theworld’s largest producer of Class 1 battery-grade nickel with aroundThe geographical distribution of mineral extraction is unlikely to shift
significantly in the near term given today’s project pipeline. However,when comparing current mining production to mineral reserves(reserves refer to the resources which could be economicallyextracted at the time of determination), there appears to be significant
unrealised potential for diversification of extraction in the longer term.
In particular, Australia, already the largest lithium producer, holds thejoint largest reserves of nickel, alongside Indonesia, with 22% of
global reserves. However, Australia is producing only 6% of currentof the rest of the supply chain apart from cobalt processing at 20%,
mostly plants in Finland. The United States has a smaller role in the
global EV battery supply chain, with only 10% of EV production and
7% of battery production capacity. Both Korea and Japan haveconsiderable shares of the supply chain downstream of raw material
processing, particularly in cathode and anode material production.
Korea is responsible for 15% of cathode, and 3% of anode material
production capacity while Japan accounts for 14% and 11%,

global production. Australia also has the second-largest reserves ofcobalt with almost 20%, while accounting for a mere 3% of current

respectively.
In terms of raw material supply and extraction, battery metals arehighly concentrated geographically and thus are relatively more
vulnerable to supply shocks and constraints. More than half of theworld’s lithium is produced in Australia while 70% of the world’s cobalt

production.
There is also significant potential to diversify natural graphite
production with Europe holding the world’s largest share with over aquarter of global reserves, primarily in Turkey. Brazil has significant
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EV batteries and supply chains

Global supply chains of EV batteries

potential for graphite and nickel, with 22% and 17% of global
reserves, respectively. Nevertheless, there are several caveats whichmust be considered with reserves such as resource quality,
particularly important for battery metals, investment and above-

decade a quarter of battery production capacity will be located inEurope and the United States. Similarly, there have been recent
announcements related to cathode materials production in Europe
and the United States. For example, Volkswagen announced a new

ground constraints which may limit potential as a reliable source of
future supply.

partnership with Umicore that aims to build cathode material
production capacity in Europe. Redwood Materials and L&F aim tobuild a US factory producing cathode material for 5 million EVs per
year by 2030, with similar plans for Europe. Northvolt, the Europeancell manufacturer, intends to produce over 100 GWh per year of its

There is a need for updated and improved geological surveys inemerging market and developing economies. Resource surveys inmany low income countries were conducted long ago when battery
metals were not in focus. An example is the East African Nickel Belt
where the US Geological Survey indicates limited Africa nickel
reserve numbers. However, in 2021, BHP struck a deal to invest
USD 100 million in the Kabanga Nickel project in Tanzania, reporting
it as one of the world’s largest nickel sulphide deposits. Similarly,
Bolivia has abundant identified lithium resources, yet no reported
reserves. This highlights the potential that updated geologicalsurveys can bring in today’s market context.

own cathode material.
Anode material production is likely to continue to be dominated by
China as it holds the entire supply chain from mining through to anodematerial production. In addition, almost all of the top-ten anodematerial production companies are Chinese, which makes new
anode production overseas largely dependent on foreign investmentby these companies. Moreover, graphite anode material prices are
not high enough to significantly incentivise new production capacity.
Although there are exceptions, such as Nouveau Monde Graphite
which is constructing both a graphite mine and graphite anode active
material plant in Canada.

On the other hand, the downstream supply chain distribution is set tochange this decade, particularly for batteries. If current policies,
announcements and investments are realised, by the end of this

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EV batteries and supply chains

Global supply chains of EV batteries

Impact of Russia’s invasion of Ukraine on battery supply chains
Lithium, cobalt and graphite supply chains are less affected by
the supply disruption caused by Russia’s invasion of Ukraine
as relatively little supply and processing is from either country.
However, there is concern regarding nickel; Russia is the thirdlargest producer, supplying about 9% and processing about 6%of global nickel in 2021. Though, more critically, Russia is theworld’s largest Class 1 nickel supplier, producing about 20% of

Nickel supply from Russia is a key source for the developing EV battery
supply chain in Europe. BASF (Germany) is building a major cathodematerial precursor plant in Finland and already has a long-term nickel
supply agreement with Norilsk Nickel. It is possible that Australia andCanada could fill the gap of supply from Russia for nickel sulphate inEurope, as well as Indonesia once HPAL projects are operational,
though Europe will also be competing with North American demand.

the world’s Class 1 battery-grade nickel, most of which issupplied by Norilsk Nickel.

Class 1 nickel production, 2021

Recent concerns for the supply of nickel from Russia, coupledwith financial speculation by the founder of Tsingshan, a major
Chinese steel producer, pushed nickel prices to an
unprecedented level of USD 100 000 per tonne (the average
price in 2021 was USD 18 500 per tonne), resulting in the
London Metal Exchange temporarily closing nickel trade. Muchof the exceptional price rise was due to a short squeeze,
however, there was an underlying increase in price driven by
Russian supply concerns in an already tight supply market.
Trading resumed and the nickel price stabilised at around
USD 33 000 per tonne, still exceptionally high. Nevertheless,significant concerns for nickel supply from Russia remain,which will likely keep prices high.

Share of Class 1 nickel production

Russia Class 1 nickel export

Russia
20%
China
33%

Other
80%

Europe67%

IEA. All rights reserved.
Sources: IEA analysis based on Benchmark Mineral Intelligence and Bloomberg NEF.

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EV batteries and supply chains

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EV battery supply chains and industrial policy

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EV batteries and supply chains

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Governments aim to support integrated supply chains for EV manufacturing
focus on building domestic battery and EV supply chains, particularly
leveraging its critical minerals supply and automotive sectors.

Many countries have announced industrial strategies that aim tocreate and expand their prominence and within integrated supply
chains. Major automotive manufacturing countries aim to extend their

Other new entrants such as Indonesia and Thailand are putting astrategic focus on battery and EV production. They aim to become
regional market leaders by leveraging their geographic proximity to
Asian market leaders as well as upstream mineral and metal
supplies. Indonesia and Thailand are attracting investments frommajor battery and EV manufacturers such as Great Wall Motors,
Foxconn, LG Group and CATL.

reach up the supply chain from making EV components andautomobiles, to also securing stable upstream supply and refining
capacity of minerals and metals
Some countries have identified battery and EV manufacturing to be
strategic sectors and look to support domestic production. Some
explicitly target investment in the sector to “future proof” economies,
build a workforce to underpin a low-carbon future and secure a
position to be a market leader in the high value-added steps in theburgeoning EV market.

CanadaChina’s rise to the largest share of global EV battery production
capacity in the world (77%) is a direct result of over a decade ofgovernment policies that support the industry. Korea, which accounts
for 5% of global production capacity, along with Japan, at 4%, haverecently launched large funding packages tocompetitiveness of their battery and EV industries.

bolster•

Share of global EV battery production capacity: 0%.

•

EV battery production capacity in 2021: 0 GWh.

In April 2022, the federal government and provincial government of
Ontario announced a CAD 518 million (USD 398 million) package tosupplement General Motor of Canada’s existing CAD 2.3 billion(USD 1.8 billion) investment in upgrading facilities in Ontario, which
includes retooling facilities to produce EVs. In addition, Ontario
received its largest automotive industry investment in history of
CAD 5 billion (USD 4 billion) with a joint venture between LG Energy
Solution Ltd. and Stellantis N.V. to produce EV batteries with atheWhile the European Union has been investing significantly over thelast few years in R&D and manufacturing capacity, it will likely taketime to develop the supply chains needed for an EU battery
production industry. Similarly, the United States recently renewed its
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EV batteries and supply chains

Global supply chains of EV batteries

production capacity of 45 GWh. The governments worked closely tofoster this investment, such as providing favourable electricity prices
and provincial and federal subsidies (which are being negotiated).

systems) in collaboration with large industrial EV car, component andbattery manufacturers. They aim to bolster NEV production inindustrial development zones through incentives such as tax
exemptions, preferable loans and co-financing, and to develop

China

industrial production bases.

•

Share of global EV battery production capacity: 76%.

Also released in mid-2021, China’s 14th Five-Year Plan for Circular•

EV battery production capacity in 2021: 655 GWh.

Economy Development (2021-2025) aims to standardise
management of resources from the battery recycling industry, as wellas to introduce both NEV battery traceability and battery recycling
traceability management systems. Administrative measures for the

China's leading role in EV battery production capacity is a direct resultof more than a decade of policies that prioritise the development of
an integrated domestic supply chain. China has long viewed batteries
as a strategic industrial sector.

re-use of NEV batteries released in August 2021 aim to standardise
and further develop the industry by requiring battery re-use
enterprises to be responsible for managing the whole life cycle of reused product design and production, packaging, transportation andrecycling of the batteries, ensure product quality, product certificationand environmentally responsible disposal.

Released in mid-2021, China’s 14th Five-Year Plan (2021-2025)
focusses on “strategic emerging industries”, which includes newenergy vehicles (NEVs). It provides guidance for state and local
governments to develop plans, including a focus on higher quality
and standards for NEV manufacturing, as well as focussed R&D
efforts for next-generation battery chemistries. Of particular note, areplans to promote the development of the Na-ion battery industry
during the 2021-25 period, using industry and product standards toachieve scale, lower cost and improved battery performance.
Regional five-year plans (e.g. Beijing, Shanghai, Guangdong, Tianjin,
Jiangsu, Fujian and Shaanxi) focus on integrating NEV production
with related industies (i.e., battery manufacturing and recycling

The Ministry of Industry and Information Technology in November
2021 released two draft guidelines for comment on the developmentof the Li-ion battery industry in order to strengthen management of
the sector. The guidelines propose plant expansions to only occur if
production can be assured to exceed 50% of capacity, technicalstandards on minimum energy density (no less than 180 Watthours per kilogramme), cycle life and the encouragement of the useof solar power in the manufacturing process. In January 2022,

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EV batteries and supply chains

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technical specifications for pollution control and treatment for waste
Li-ion batteries was implemented (for a trial period).

battery value chain. The EuBatIn, established in 2021, brings
together 12 EU member states and 40 companies to focus on battery
supply chains and has secured funding for EUR 2.9 billion

European Union•

Share of global EV battery production capacity: 7%.

•

EV battery production capacity in 2021: 60 GWh.

(USD 3.4 billion) for the period to 2031.
The European Commission proposed revisions to the EU Battery
Directive to elevate it to a regulation as part of actions taken for theGreen New Deal in late 2020. They introduce mandatory carbon
footprint declarations for batteries sold in Europe, along withminimum requirements for recycled content and requirements forcollection and recycling of automotive EV batteries. As of March
2022, the latest update indicates the European Parliament hasreached a consensus on the proposed revisions with a few
amendments. Of note, this includes the addition of a new battery
category, “light means of transport” (e.g. electric bicycles) andminimum targets for recovered cobalt, lead, lithium or nickel fromwaste. The proposals are to be discussed with the member states in
the Council of the European Union.

The European Union has a strategic focus on the development ofdomestic battery supply chains.
In March 2022, the European Battery Alliance and the US Li-Bridge
Alliance announced a collaboration to accelerate the development of
Li-ion and next-generation batteries, including critical raw materials.
The Important Projects of Common European Interest (IPCEI) is a
key strategic instrument with regard to the implementation of theEuropean Union Industrial Strategy. A two-part IPCEI has been
implemented to promote battery production: the IPCEI on
Batteries and the IPCEI European Battery Innovation (EuBatIn).
Both have in common that their participants represent thecomplete value chain, from material through the cells to thebattery system and recycling. There is also a high degree of
networking between the companies and the two IPCEIs. The
Batteries IPCEI, established in 2019, brings together companies
headquartered in seven EU member states from various parts of the

The Batt4EU Partnership was launched in June 2021 to combine
efforts of the European Commission and members of the Batteries
European Partnership Association, which includes industry and R&D
stakeholders within the battery supply chain. The partnership will fundbattery R&D and innovation projects within the framework of the
Horizon Europe Programme. A MoU was signed between the twoparties stating that the European Commission will direct up to

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EV batteries and supply chains

Global supply chains of EV batteries

EUR 925 million (USD 1 billion) in funding between 2021 and 2027

sector was allocated INR 181 billion (USD 243 million). Subsidies areto be provided over a span of five years based on performance
metrics such as energy density (ACC only), battery cycle life (ACCfor battery research and innovation.
In February 2022, the European Commission granted EIT
InnoEnergy EUR 10 million (USD 11.8 million) towards the European
Battery Alliance Academy to help bridge a growing skills gap for theonly) and number of units sold or components manufactured in India.
A request for proposals was launched in January 2022 for bothschemes, with the government to award contracts by March 2022.
For the ACC scheme, bids totalled 130 GWh, close to three times theamount of the manufacturing capacity to be awarded . A total of
95 applicants were approved. Final recipients include both large auto
manufacturers and OEMs as well as small and medium enterprisesin the industry. For the advanced automotive technology and autocomponents scheme applications totalled a proposed INR 450 billion(USD 6.1 billion) for all vehicle categories, and were submitted byboth incumbant automotive OEMs and new market entrants.

work force across the European battery value chain.
In France, a EUR 30 billion (USD 35 billion) overall investment planwaspresented
in
2021.
It
providesforup
to
EUR 4 billion (USD 4.7 billion) to support the automotive industry to
produce 2 million EVs by 2030. In Germany, EUR 1 billion(USD 1.2 billion) in funding through 2022 was allocated by theFederal Ministry for Economic Affairs and Climate Action to establish
the country as a global leader in battery cell production.

India
•

Share of global EV battery production capacity: 0%.

•

EV battery production capacity in 2021: 0 GWh.

Japan

India’s Production Linked Incentives scheme has a strategic focus onadvanced automotive technology and components (including EV)
and advanced chemistry cell battery (ACC) sectors. The automotive
and auto components sector was allocated close to INR 259 billion(USD 3.5 billion). With an aim to build capacity of 50 GWh, the ACC•

Share of global EV battery production capacity: 4%.

•

EV battery production capacity in 2021: 36 GWh.

Japan released a Strategic Energy Plan in 2021 which reemphasised targets under the 2020 Green Growth Strategy forincreasing domestic production for vehicle batteries to 100 GWh by
2030.

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The Battery Association for Supply Chains, formed in April 2021,
includes key Japanese OEMs. Its founding document urged thegovernment to provide financial subsidies for battery production
facilities. After consultations, the Japan’s government announced a

An additional KRW 1.5 trillion (USD 1.3 billion) will be made available
to support battery development in Korea through tax incentives, R&D
and capital investments.

United States

package of JPY 100 billion (USD 910 million) for the fiscal year 2021
supplementary budget for domestic battery production.

Korea
•

Share of global EV battery production capacity: 5%.

•

EV battery production capacity in 2021: 41 GWh.

•

Share of global EV battery production capacity: 7%.

•

EV battery production capacity in 2021: 57 GWh.

An executive order in early 2021 mandated a thorough assessmentof US supply chains. This includes the identification of risks in highcapacity battery supply chains.

The mid-2021 announcement of the K-battery blueprint renews
government focus on expanding tax incentives and R&D spending.
The stated ambition is for Korea to be the number one EV battery
manufacturing country in the world by 2030.

With this focus on battery supply chains came a host of strategic
policy announcements and blueprints. One included the release of
the National Blueprint for Lithium Batteries (2021-2030), which
elaborates a vision to establish secure battery materials andtechnology supply chains within the country. It aims to set guidancefor policy makers, industry and investors for the long term by creating
goals across the entire supply chain. These include: securing
upstream raw and critical minerals and materials processing base;creating domestic electrode, cell and pack manufacturing sectors;
end-of-life critical material recycling; and R&D efforts on battery
technology development.

The formation of a “grand-alliance” between the top-three Korean(and global) domestic battery manufacturers (LG Energy Solution,
Samsung SDI and SK Innovation) aims to build an industrial network.
A fund of KRW 80 billion (USD 69 million) will be established, with
contributions from the government, companies and financial
institutions, to support battery technology, parts and materials
development in collaboration with other companies and academia.

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EV batteries and supply chains

Global supply chains of EV batteries

In October 2021, the US Department of Energy Argonne National
Laboratory announced the creation of Li-Bridge. It is a new publicprivate partnership to bridge gaps in the domestic lithium battery
supply chain. It marks the first collaboarion of its kind in the US

2030. Recent statements by government officials signal an intent tostrive for 100% ZEV sales by 2035.
Thailand’s Eastern Economic Corridor (EEC) is providing incentives
for strategic manufacturing companies (including EVs) such as
corporate tax breaks, infrastructure development and low interest
loans. This spurred deals for EV and battery production facilities,
such as with Chinese automaker Great Wall Motors in June 2021 anda USD 1 billion 8 GWh battery production plant both in the Rayong
EEC. PTT, the state-owned oil and gas group, signed a joint venture
deal with Foxconn to make EVs starting in 2024 with a capacity of
50 000 electric cars per year and targeted to expand to 150 000 by
2030.

battery industry.
In June 2021, USD 60 million was awarded for 24 projects to reduce
CO2 emissions from passenger cars and light/heavy trucks. This
includes projects to accelerate innovation for EV batteries, electric
drive systems and new mobility system technologies (automated,connected, electric and shared vehicles). The government approved
close to USD 3 billion to boost production of advanced battery supply
chains in February 2022 under the Infrastructure Investment andJobs Act (Bipartisan Infrastructure Law). This includes funding for
upstream battery materials and refining as well as for production
plants, battery cell and pack manufacturing facilities and recycling
facilities.

Indonesia has a production target of 600 000 electric LDVs and2.45 million electric two-wheelers by 2030. It aims to leverage its
large raw nickel ore reserves upstream while offering incentives
further downstream for EV component producers and manufacturers.
This follows on from the Presidential Regulation to prioritise domestic
EV production. It aims to ensure a certain percentage of IndonesianSoutheast Asia•

Share of global EV battery production capacity: 1.0%.

•

EV battery production capacity in 2021: 8.7 GWh.

sourced EV components and nickel are used in EV production.
The Indonesia Battery Corporation, a state-owned battery
manufacturer, was formed in March 2021 by the Ministry of StateOwned Enterprises and four other state-owned entities. The
investment needed for this holding is Indonesian rupiah(IDR) 238 trillion (USD 17 billion). The corporation’s production

Thailand, which has one of the largest automotive production centres
in Southeast Asia, released guidelines to promote EVs and states its
ambition to have 30% of all cars produced domestically to be EVs in
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EV batteries and supply chains

Global supply chains of EV batteries

target is up to 140 GWh of battery cells by 2030, of which 50 GWh
will be for export. For context, current global battery production
capacity is about 871 GWh.

Other potential deals include a USD 5 billion lithium battery plant withprojected production in 2024 between China’s Contemporary
Amperex Technology (CATL) and Indonesia’s PT Aneka Tambang.
In early 2022, Foxconn signed a MoU with the Indonesia’s Ministry ofA memorandum of understanding (MoU) was signed in July 2021 for
an EV battery factory between the Ministry of Investment andHyundai Motor Company with a capacity of 10 GWh, with a price tag

Investment and Chinese Taipei’s electric scooter manufacturerof USD 1.1 billion. The factory, to be built with Korean LG Group,
aims to incorporate battery precursor production with packproduction, as well as mining, smelting and recycling facilities. Thisdeal is a part of a larger MoU signed by Indonesia’s government anda consortium led by the LG Group for USD 9.8 billion to develop
integrated EV supply chains. The consortium signed a non-binding
agreement with PT Aneka Tambang Tbk, the state-owned mining
company, and Indonesia Battery Corporation.
Gogoro (known for battery swapping) to facilitate battery
manufacturing, and the development of EV supportive industries
such as energy storage systems and battery recycling. This include
Foxconn’s production of solid-state and lithium iron phosphatebatteries.

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EV batteries and supply chains

Global supply chains of EV batteries

Harmonised technical regulations for the safe and sustainable deployment of EVs
In addition to policies, financial incentives and market penetration
targets, technical regulations have an essential role to ensure the

The durability standard aims to prevent the use of low quality
batteries and to ensure that only durable batteries are installed insafe and sustainable deployment of EVs. The World Forum for
Harmonization of Vehicle Regulations (WP.29), hosted by theUnited Nations Economic Commission for Europe, develops legallybinding regulations covering technical requirements to improveEVs. This is crucial to increase consumer trust and to improve theenvironmental performance of EVs beyond their low emissions
output. Making sure each battery lasts longer would help to easethe pressure on demand for critical raw materials needed for theirvehicle safety and lower environmental impacts.

production and reduce waste from used batteries. Similar provisions
are now being developed for heavy-duty electric vehicles (e-busesand e-trucks).

UN Regulation No. 100 / UN GTR No. 20 on Electric Vehicle Safety
prescribes testing procedures to ensure EVs are safe for use. It
details methodologies to test EVs and protect users from electricalshocks, ensure fire, water, vibration and mechanical resistance of
key EV components, among other safety tests.
UN GTR No.22 on In-Vehicle Battery Durability was adopted in
March 2022 and prescribes minimum performance requirements forthe durability of batteries in electrified vehicles. It requires
manufacturers to certify that the batteries fitted in their EVs will loseless than 20% of initial capacity over five years or 100 000 km and

The battery durability standard was adopted by many
countries/regions that committed to transpose it into their national
legislation. They are Australia, Canada, China, European Union,
India, Japan, Korea, Malaysia, Norway, Russian Federation, South
Africa, Tunisia, United Kingdom and United States. In the European
Union, the provisions are expected to be part of the forthcomingEuro 7/VII legislation.

less than 30% over eight years or 160 000 kms.

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EV batteries and supply chains

Global supply chains of EV batteries

Countries rush to push policies to ensure stable supply of minerals critical for EV battery
supply chains
Major battery mineral and metal producers around the world havebegun to prioritise not only mining but refining capacity to be able tosecurely supply materials for EV battery supply chains around theCanadaworld.

budget – the first budget announcement of its kind. Of this, around
CAD 1.5 billion (USD 1.2 billion) is for infrastructure investment tosupport critical mineral supply chains, CAD 79.2 million(USD 60.9 million) is for integrated data sets for critical mineral

To implement its Critical Minerals Strategy, the government allocatedCAD 3.8 billion (USD 2.9 billion) over eight years in the 2022

Australia
Australia is the largest producer of lithium in the world and one of the
top producers of nickel globally. In September 2021, the government
released an AUD 1.3 billion (USD 980 million) loan facility forAustralian critical minerals targeted for advanced sectors including

exploration and development, and a new 30% tax credit for criticalmineral exploration.

Chile

EV battery production. In addition, a AUD 2 billion (USD 1.5 billion)
fund was announced to increase critical mineral processing capacity,
including for battery minerals and metals.

Chile remains one of the largest producers of lithium in the world,though there has been slow growth in developing new projects. To
counter this trend, in October 2021 the government launched a
special auction for operating contracts to explore and produce
400 000 tonnes of lithium. Divided into five tranches of 80 000 tonnes
each, it provides successful bidders a period of seven years to
conduct geological exploration, studies and 20 years for production.
The government will take a royalty payment, plus a variable payment

In December 2021, the federal government awarded “Major ProjectStatus” to a AUD 2.4 billion (USD 1.8 billion) battery minerals
complex in New South Wales for a nickel and cobalt mine, materials
processing and recycling facility. Having major project status allows
access to additional financial support, co-ordination and streamlined
regulatory approvals. The facility is planned to be powered almost
entirely by renewables, making it one of the world’s largest battery

during production.

metal producers operating on renewable energy.

PAGE | 41

EV batteries and supply chains

Global supply chains of EV batteries

China

circular use of resources, and investment in refining and separation
capacities (including lithium). The European Parliament has asked
the European Commission and member states to create an IPCEI on
critical raw materials to focus on reducing criticality and dependence.

China continues to dominate in the mid- to downstream EV battery
supply chain, though it currently owns less than 25% of upstream
mining capacity.

Indonesia

The 14th Five-Year Plan for the Development of the Raw Materials
Industry (2021-2025) was released in December 2021. It aims tofocus technological innovation in key materials for development,Indonesia is the largest nickel producer in the world. It aims tomaintain that position as a key supplier for the EV battery

including promoting the R&D of new, more efficient andenvironmentally-sensitive mining technologies and minerals,
including salt lake lithium. The plan also aims to develop “urban
mines” to support large-scale recovery of lithium, nickel, cobalt andmanufacturing sector.
In 2020, Indonesia imposed a nickel ore export ban. This wasfollowed in 2021 with consideration of imposition of a tax on theexport of nickel products that contain less than 70% nickel content in
an attempt to further develop domestic refining capacity. Today, mostnickel products contain between 30-40% nickel and are generally
exported to be further refined to have higher purity nickel products

tungsten at recycling bases and industrial clusters.

European Union
Formed in 2020, the European Raw Materials Alliance (ERMA) was
created as a part of the EU’s Action Plan on Critical Raw Materials.

(70% or above) and could thus significantly impact exports.

Along with working on regulatory bottlenecks and stakeholder
engagement, its focus is to act as a pipeline to catalyse investment
for projects. ERMA has announced plans to launch a raw materials
investment fund planned for 2022

United States
In March 2022, the United States invoked the Defence Production Act
to rapidly boost US production of critical minerals for EV and storage
batteries, focussing on lithium, nickel, cobalt, graphite andmanganese.

In November 2021, the European Parliament voted in the Critical
Raw Materials Strategy with a focus on “open strategic autonomy”,
i.e. access to alternatives and competition when sourcing critical raw
materials. Other aspects include sourcing critical raw materials fromwithin the European Union member states, increased recycling andOver the past year, the United States has made significant efforts toenhance EV battery supply chains, including critical minerals. In
February 2021, the US Department of Energy awarded

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EV batteries and supply chains

Global supply chains of EV batteries

USD 44 million to the Mining Innovations for Negative Emissions
Resource Recovery Program for technological development toincrease domestic critical element supplies. The fund focusses oncommercial-ready technologies that are either net zero or net
negative emissions for critical minerals needed for the clean energy
transition.
In April 2021, 13 critical mineral projects were selected to receive a
total of USD 19 million. The fund focuses on projects that would helptransition fossil fuel producing communities towards clean energy
jobs, including increased recycling from critical mineral resources andwaste streams, critical mineral and metal extraction from fossil fuelproducts and their waste streams for use in various applications
including EV batteries.
In February 2022, the US departments of Energy, Defense and Statesigned a Memorandum of Agreement to support stockpiling of criticalminerals that would facilitate the transition to clean energy, inparticular for batteries and wind turbines, and to meet national
security needs.

PAGE | 43

EV batteries and supply chains

Global supply chains of EV batteries

Outlook for batteries and critical materials

PAGE | 44

EV batteries and supply chains

Global supply chains of EV batteries

Battery demand surges in all regions driven by battery electric cars
4.0

EV battery demand by region, 2021-2030

TWh per year

TWh per year

EV battery demand by mode, 2021-2030

3.5
3.0
2.5

4.0
3.5
3.0
2.5

2.0

2.0

1.5

1.5

1.0

1.0

0.5

0.5

0.0

0.0

STEPS
2021
LDV

APS

2025
Two/three-wheeler

STEPS

APS

2021

2030
Bus

STEPS

China

TrucksAPS

2025
Europe

STEPS

APS

2030
United States

Other

IEA. All rights reserved.
Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario; LDV = light-duty vehicle.

PAGE | 45

EV batteries and supply chains

Global supply chains of EV batteries

EVs increase battery demand sixfold and drive rapid expansion in all parts of supply chains
Increased EV sales necessitate a scale up of all elements of thebattery supply chain. While for most components, EVs are not too
different from conventional vehicles, batteries rely on distinct anddue to demand for longer driving ranges and larger vehicles. This
trend contributes to around a third of the rise in battery demand andis especially pronounced in North America.

critical materials dependent supply chains which must dramaticallyscale up this decade to meet projected demand. Most supply chain
components can be scaled up rapidly; battery production factories
can be built in under two years and the project pipeline is very large.

China is projected to have the largest battery demand, though its
global share shrinks from 60% in 2021 to 40% in 2030 in the Stated
Policies Scenario and 25% in the Announced Pledges Scenario. The
United States undergoes the fastest battery demand increase amongmajor markets driven by rapid EV deployment as well as the largest
battery capacity per vehicle, increasing share slightly in the Stated
Policies Scenario with around 15% in 2030 from 11% in 2021 andincreasing to above 20% in the Announced Pledges Scenario in2030. The share of global EV battery demand is also projected todecrease in Europe from 25% in 2021 to 20% in both the Stated

On the other hand, raw material extraction requires investment long
before production reaches scale.

Planned battery factories can meet 2030 demand
In the Stated Policies Scenario, battery demand from EVs increases
in 2030 to 2.2 TWh and to 3.5 TWh in the Announced Pledges
Scenario. This is a more than sixfold increase from the productionlevel in 2021 for the Stated Policies Scenario and a ten-fold increase
for the Announced Pledges Scenario. Achieving such productionlevels requires the manufacture of an additional 52 gigafactories of
35 GWh annual production capacity in the Stated Policies Scenario
and 90 gigafactories in the Announced Pledges Scenario.

Policies and Announced Pledges Scenarios in 2030.
According to recent accounting by Benchmark Mineral Intelligence,
the announced battery production capacity by private companies for
EVs in 2030 amounts to 4.6 TWh, a higher value than for both theStated Policies Scenario and Announced Pledges Scenario demand.
If all the announced capacity successfully came online by 2030, using

Battery demand is driven by electric cars which account for 85% of
the projected total by 2030 in both scenarios. Not only will electric car
sales increase, but current trends and new model announcementssuggest that vehicles will have increasingly higher battery capacity

total battery demand, the utilisation factor of battery manufacturing
would be 47% in the Stated Policies Scenario, slightly higher than in
2021 (43% based on nameplate capacity). Battery production
capacity will still be concentrated in China (70%), yet more
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EV batteries and supply chains

Global supply chains of EV batteries

investments are being directed to other regions, with a quarter ofbattery production capacity expected in Europe and the United Statesby 2030.

diversification is expected in the longer term based on
announcements of planned production in Europe and North America.
For example, by BASF with a planned cathode material production
plant in Canada.

Anode and cathode production is slowly becoming moregeographically diversified
Scaling up cell and battery production will require additional output
from anode and cathode manufacturers. In the Stated Policies
Scenario, there is a sixfold increase in cathode demand and a fivefold
increase in anode demand in 2030 relative to 2021 production. For
the Announced Pledges Scenario, cathode demand increases tenfold and anode demand eightfold. In the Stated Policies Scenario,
cathode production reaches 3 300 kt and anode production 1 500 kt
in 2030, requiring around 29 additional cathode material plants and23 additional anode material plants. For the Announced Pledges
Scenario, cathode demand is 5 200 kt and anode is 2 500 kt,
requiring about 50 cathode and 40 anode plants. For each GWh of
battery production, 1.5 kt of cathode and 0.9 kt of anode material are
required. Current cathode and anode material production are highly
concentrated; together China, Japan and Korea account for 97% of
current cathode and and 99% of anode production. Looking forward,
the picture does not change much in the near term. Assessing all
current announced and under construction cathode and anodematerial production plants, which are set to be online by 2025, shows
the United States and Europe together will only produce around 4%
of cathode material and 2% of anode material in 2025. Increased

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EV batteries and supply chains

Global supply chains of EV batteries

All elements of EV battery supply chains expand significantly to meet projected demand
Number of mines to produce required levels of metals, anode/cathode production plants, battery gigafactories and EV plants required tomeet projected demand in 2030 relative to 2021

+41
400

+17

300

+60

5 000

250

4 000
+30

+50

5 000

3 000
4 000

2 000
+29

3 000

3 000

1 500

2 000

1 000

1 000

500

2 500
+23

2 000

100

1 000

2021 STEPS APS
2030

100

APS

2030

2021 STEPS APS
2030

2021 STEPS

APS

+81

40

30

+48

10

500
2021

2030

Metals

50

20

1 500
1 000

50

2021 STEPS

+52

2 000

150
200

+90

3 500

+40

2 500

EVs

Battery cells
4 000

+11

200

300

Anode
3 000

kt

kt

kt

kt

+50

500

Cathode6 000

Number of EVs (million )Cobalt350

GWh

Nickel6 000

kt

Lithium
600

STEPS

APS

2030

Cell components

2021

STEPS

APS

2030

Batteries

2021

STEPS

APS

2030

EVs

IEA. All rights reserved.
Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario. Number of additional mines/plants/factories required to meet projected demand
from the 2021 demand level is shown by the arrows. Projected demand is annual. Metal demand is total demand including EV and non-EV demand. Assumes theaverage annual production capacities: lithium mine - 8 kt; nickel mine - 38 kt; cobalt mine - 7 kt; cathode plant - 94 kt; anode plant - 54 kt; battery gigafactory 35 GWh; and EV production plant - 0.5 million vehicles. Nickel demand does not distinguish between Class 1 and Class 2 nickel.
Sources: IEA analysis based on S&P Global ; Bloomberg NEF; Benchmark Mineral Intelligence.

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EV batteries and supply chains

Global supply chains of EV batteries

Demand for EV batteries drives a surge in metal demand
Lithium is the most critical metal for EVs as it has no commerciallyavailable substitute at scale. Therefore, it experiences the fastest
demand growth of the battery metals. Practically, all of the increase2030) to reduce costs and due to environmental, social andgovernance concerns. However, the surge in global demand for EV
batteries still increases total cobalt demand this decade.

in demand for lithium to 2030 is projected to come from EV batteries
in both scenarios.
Lithium demand in the Stated Policies Scenario reaches about 330 kt
by 2030, a fourfold increase relative to 2021 production (80 kt). For
the Announced Pledges Scenario, lithium demand reaches 500 kt, asixfold increase from 2021 driven by higher EV sales across allmodes. EV batteries were responsible for almost half of global lithium
demand in 2021. In 2030 this rises to 70% in the Stated Policies
Scenario and almost 80% in the Announced Pledges Scenario. Inorder to meet this surge in lithium demand, around 30 new lithium

Share of total demand for battery metals from EVs andclean energy technologies, 2021 and 2030
100%

80%

60%

40%

20%

mines are needed in the Stated Policies Scenario by 2030 and
50 new lithium mines in the Announced Pledges Scenario, assuming0%

an average annual lithium mine production capacity of 8 kt.

2021

2030

2030

STEPS

APS

Lithium
Lithium

By 2030, nickel is facing the largest absolute demand increase as
high-nickel chemistries are the current dominant cathode for EVs,
and are expected to remain so. High-nickel Li-ion batteries require far
more nickel than even lithium. For example, a NMC811 battery
requires almost seven times more nickel than lithium by weight. For
cobalt, the opposite is true as battery makers continue to move tolower cobalt content chemistries (and even cobalt-free chemistries by

2021

2030

2030

STEPS

APS

2021

CobaltCobaltOthersClean energy technologies

2030

2030

STEPS

APS

NickelNickel
EV batteries

IEA. All rights reserved.
Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges
Scenario. Clean energy technologies include: stationary energy storage
batteries, renewables, nuclear, hydrogen technologies and grid technologies.
Sources: IEA analysis based on S&P Global.

PAGE | 49

EV batteries and supply chains

Global supply chains of EV batteries

In the Stated Policies Scenario, total nickel demand rises 60% toaround 4 200 kt by 2030 while total cobalt demand increases 45% to250 kt. Out of total demand for nickel, EV batteries account for a fifthof demand in 2030 and about a quarter of demand for cobalt in theStated Policies Scenario. In the Announced Pledges Scenario, nickel
and cobalt demand from EV batteries is 65% higher than in the Stated
Policies Scenario, with an EV share of 30% and 40%, respectively.
To meet the projected demand in 2030 in the Stated Policies
Scenario, 41 nickel and 11 cobalt additional mines are needed – asignificant scaling up requirement. For the Announced Pledges
Scenario, 60 nickel and 17 cobalt new mines are required in 2030,(assuming average annual mine production capacity of 38 kt for
nickel and 7 kt for cobalt).

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EV batteries and supply chains

Global supply chains of EV batteries

Meeting battery metal demand in 2030 and beyond requires investment to be mobilised now,
particularly in new mining capacity
Range of typical lead times to initial production for selected steps in EV battery supply chain

Lithium Mine
Nickel Mine
Raw Material
Processing
Cathode/Anodeproduction
Battery/cell
production
EV production
0

5

10

15

20
Years
IEA. All rights reserved.

Notes: Lead times for mines are calculated from completion of the preliminary feasibility study to the start of production. For other elements, lead times are calculated
from investment decision to production.
Sources: IEA analysis based on Heijlen et al. (2021); Benchmark Mineral Intelligence; S&P Global.
PAGE | 51

EV batteries and supply chains

Global supply chains of EV batteries

Investment is needed now to meet battery metal demand in 2030
To meet the demand for projected EV deployment various elementsin the supply chain will need to expand. Ramping up of countries’
climate-related amibitions and pledges will also increase demand

which is expected to begin commercial production in 2022, thus
requiring four years. In China, cathode factories can be built in lessthan two years due to previous experience and the use of existing

further for metals to supply the necessary EV batteries. As observedin 2021, demand for EVs can increase very rapidly though scaling up
supply requires time, as mines and factories cannot be brought online

sites for expansion.

overnight.
Elements of the supply chains have various lead times. The
downstream stage, EV vehicle assembly, is the most dynamic, since
automobile production capacity is much higher than demand,
automakers can retool existing factories to manufacture EVs. For
example, work to retool (convert a plant from ICE vehicles to EVs) at
Volkswagen’s Zwickau factory in Germany began in 2018 and thefirst EVs were produced in November 2019. Similarly, Tesla’s EV
factory in Shanghai was completed in roughly one year after breaking
ground in early 2019.

By far the longest lead times are in the extraction of raw materials.
After an extractable resource is identified through exploration, it cantake from four to more than twenty years for a mine to begin
commercial production. Four to sixteen years can be required for thenecessary feasibility studies, and engineering and construction work.
Long lead times are often required to secure financing and thenecessary permits. Securing permits can take from one to ten years
due to some countries requiring multiple permits or due to permitting
delays. There is some evidence that over the decades, the timerequired to bring mines online has increased and this can be partiallyattributed to longer permitting and feasibility study lead times.
In addition to the time required to begin commercial production,

Battery production lead times can be more varied. In China, CATL
has been able to deliver a new cell manufacturing facility in under one
year due to experience in their production, while four years elapsed
between the announcement of Northvolt’s first factory in Sweden andthe beginning of production. Anode and cathode plants have leadtimes that are typical for chemical plants, which vary by region.
Umicore announced production plans for a plant in Poland in 2018,
PAGE | 52

mines often require around ten years before they reach nameplateproduction capacity. An analysis of lead times across the supply
chain indicates that with sufficient investment, downstream stages of
the EV battery supply chain can ramp up to meet even rapid
increases in demand in the 2030 time frame. However, upstream
mineral extraction can cause major bottlenecks unless adequate
investments are delivered well in advance.

EV batteries and supply chains

Global supply chains of EV batteries

Battery chemistries have notably different sensitivities to commodity prices
Impact of 10% commodity price change on the battery pack price for selected battery chemistries
Na-ionLithium

LMR-NMCLNMO

Nickel

LNO
NMCA
LFP

Cobalt

NMC811
NMC622
0%

1%

2%

3%

Battery pack price change %IEA. All rights reserved.
Notes: Na-ion = sodium-ion. Manganese-rich chemistries: LMR-NMC = lithium-manganese-rich NMC; LNMO = lithium nickel manganese oxide. LNO = lithium nickel
oxide. NMCA = lithium nickel manganese cobalt aluminium oxide. LFP = lithium iron phosphate. NMC = lithium nickel manganese cobalt oxide (NMC622 and
NMC811). Battery pack price sensitivity to commodity prices. All chemistries modelled with graphite anode. Cathode thickness kept constant at 120 µm with cathodeloading adjusted. Modelled with 2021 average commodity prices as the base and then with 10% increase in lithium, nickel and cobalt prices. Na-ion contains nolithium, nickel or cobalt.
Sources: IEA analysis based on BatPaC (2022); Dhir et al (2021); Greenwood et al (2021); Bloomberg NEF.

PAGE | 53

EV batteries and supply chains

Global supply chains of EV batteries

Battery chemistries are evolving in response to tight supply
The evolution of battery chemistries will determine which metals will
face the greatest demand. Given the long lead times required toincrease metal production, optimising and diversifying battery

major growth in volume models in Europe and the United States in
the coming years. Announcements have been made by key
automakers such as Tesla and Volkswagen for LFP use for standard
range EVs in both markets. The possibility of battery packs containing
both LFP and high-nickel recently became reality with NIO
announcing their CTP pack including both LFP and NMC cells toutilise the benefits of both chemistries.

chemistries will play an important role in reducing demand for specificcritical metals.
Today, lithium-ion batteries for EVs are either nickel-based (NMC andNCA) or lithium iron phosphate (LFP). The former have higher energy
density and account for the vast majority of EV batteries outside of
China. LFP has lower energy density but also lower cost and is widely

For mid-range vehicles, the manganese-rich chemistry (lithium nickel
manganese oxide [LNMO]) is a strong contender as it has a higher
energy density than LFP, yet does not reach the levels of the highnickel chemistries. The larger proportion of manganese in LNMO
reduces material costs and commodity exposure considerablycompared to high-nickel chemistries. However, LNMO is still underdevelopment. Volkswagen has indicated its long-term strategy to
pursue manganese-rich chemistries for mass-market EV models.

used in China for both light- and heavy-duty vehicles.
Battery chemistries will be more diversified by 2030 as manufacturers
select battery chemistries to serve specific vehicle characteristics. As
exemplified by Volkswagen’s announcement, chemistries will be
adapted to the vehicle category: premium vehicles can be expected
to use the most high energy density batteries available, likely higher
nickel content chemistries such as NCA95, NMCA and NMC9.5.5, or
potentially those with even higher energy density, such as lithium
nickel oxide (LNO) or lithium-manganese-rich NMC (LMR-NMC) if
research challenges can be solved and commercially viable cycle life
is achieved. For lower end, high volume and principally urban
vehicles, LFP will be the primary chemistry as driving range is not thepriority, and instead it is cost. Moreover, due to high commodity prices
for nickel and cobalt and the expiry of key patents, LFP is set for

For medium and heavy-duty vehicles, LFP will account for the vast
majority of installations as cost and reliability will be more important
for the early applications of electric trucks. LFP has the best cycle lifeof the leading chemistries which suits frequent, short trips and being
recharged often. On the other hand, longer range electric trucks arelikely to use nickel-based chemistries with the highest energy density,
but their deployment in the period to 2030 is limited.

PAGE | 54

EV batteries and supply chains

Global supply chains of EV batteries

The future of battery chemistries is not set in stone. There areadvantages and disadvantages of the various chemistries. A
sustained period of high battery metal prices may therefore have adramatic impact on battery chemistries, accelerating the shifts

density applications. However, it is comparable with LFP with onlyaround 20% lower energy density than the leading LFP cells.
Therefore, for applications where energy density is not critical, forexample urban EVs or grid-scale storage, Na-ion is suitable. CATL is
also mitigating the energy density limitations through their new AB
battery pack design which can integrate both Li-ion and Na-ion cells
in one pack.

already underway and anticipated due to current high prices.
Sustained high commodity prices would support a shift towards
chemistries with lower critical mineral intensity. Two primary impacts
can be expected. First, a stronger shift to commercial chemistries
with lower critical material intensity, particularly LFP which contains
no nickel or cobalt. Second, an acceleration in the development of
new chemistries which rely on less critical minerals, such as themanganese-rich cathode chemistry LNMO and even alternative
lithium-free battery chemistries similar to Li-ion such as sodium-ion(Na-ion).

The critical advantage of Na-ion over Li-ion is that it relies onabundant and low cost minerals. The cathode material for the CATL
Na-ion battery (Prussian White) is made of low cost elements sodium,iron, nitrogen and carbon. Na-ion cannot use graphite anodes, so
instead uses hard carbon. In addition, less copper is required as Naion can use aluminium anode current collectors, unlike Li-ion. While
Na-ion has advanced beyond the research stage with demonstrationof commercially viable performance, there are no supply chains
today for its cathode and anode materials. The main uncertainties
around the deployment of Na-ion is the scalability of the production
processes for these materials and the time required to develop an
industrial scale supply chain. Fortunately, due to the similarity of Naion and Li-ion, it is relatively simple to adapt current cell factories tothe production of Na-ion cells.

Sodium-ion batteries
While researchers across the world are working to develop battery
chemistries that do not use lithium, the closest most viable option
today is Na-ion technology. Na-ion is currently being developed by
one of the world’s largest battery makers, CATL, which commerciallyintroduced Na-ion in 2021 and plans to form a basic industrial supply
chain by 2023. Alongside the developments from CATL for Na-ion,
the Chinese government plans to promote the development of the
Na-ion battery industry in its 14th Five-Year Plan, with industry
standards to achieve scale, lower cost and improve performance. Naion cells will have just over half the energy density of leading highnickel chemistries and therefore, will not be used for high energy

Constrained Chemistry Case
To illustrate the impact of the possible trends, we present theConstrained Chemistry Case. It focusses on cathode chemistries toassess the impact of prices remaining high for longer, coupled with a
PAGE | 55

EV batteries and supply chains

Global supply chains of EV batteries

Light-duty vehicle battery chemistry projections,
Constrained Chemistry and Base cases, 2021 and 2030
Cathode chemistry share (%)

strong reaction from automakers to high prices. The most significant
change is major substitution from high-nickel cathode chemistries to
LFP. In the Constrained Chemistry Case for the Stated Policies
Scenario, global demand for nickel is reduced by 10% or about 440 kt
per year, while the demand for cobalt is reduced by 15% equivalent
to 35 kt per year. The reduction in nickel is substantial as it is almost
twice the 2021 total production of nickel in Russia (the world’s largest
Class 1 nickel producer). For the Announced Pledges Scenario, thedemand reduction is even more significant with 15% total demand
reduction for nickel and 20% for cobalt.
Lithium demand would be slightly reduced in the Constrained
Chemistry Case, with only a 3% reduction in both the Stated Policies
and Announced Pledges Scenarios mainly due to LFP having aslightly lower lithium intensity per kWh than high-nickel chemistries
so its much larger deployment also reduces lithium demand. LNMO
also has lower lithium intensity so it supports lithium demand
reduction. The introduction of Na-ion by 2030, being the only
chemistry that does not contain lithium, notably decreases lithium
demand with only a small share. Therefore, in the short term, lithium
demand cannot be significantly reduced, though there is potential in
the longer term.

100%

Na-ion
LNMO
LMO

80%

LFP
LNO

60%

LMR-NMCNMC-highNi

40%

NMC-medNi
NMC-lowNi

20%

NMCA
NCA+

0%

2021

2030 Base 2030 Constrained

IEA. All rights reserved.
Notes: Battery cathode chemistries include: Na-ion = sodium-ion. LNMO =lithium nickel manganese oxide. LMO = lithium manganese oxide. LFP =lithium iron phosphate. LNO = lithium nickel oxide. LMR-NMC = lithiummanganese-rich NMC. NMC = lithium nickel manganese cobalt oxide. NMChighNi includes: NMC811 and NMC9.5.5. NMC-medNi includes: NMC532,
NMC622 and NMC721. NMC-lowNi includes: NMC333. NMCA = lithium nickel
manganese cobalt aluminium oxide. NCA = lithium nickel cobalt aluminium
oxide. NCA+ includes: NCA85, NCA90, NCA92 and NCA95. The Base andConstrained Chemistry cases refer to different battery chemistry shares in
2030. The Base Case is what is expected taking into account optimal
allocation of chemistries to appropriate use-cases as well as recent pricemovements. The Constrained Chemistry Case depicts the consequence of a
prolonged period of high commodity prices, coupled with strong reactions byautomakers to price signals.

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EV batteries and supply chains

Global supply chains of EV batteries

Battery metal demand reduction in Constrained Chemistryversus Base cases

Material demand reduction from Base
Case (%)

STEPS
0%

Lithium

Nickelanodes, dramatically improving driving range capability, opening
other applications and eventually driving down costs. There has been
considerable activity and industry announcements for ASSBs
recently from both start-ups and established battery makers. For

APS
CobaltLithium

NickelCobaltinstance, Nissan is starting pilot production in 2024 and aims to
produce EVs with ASSBs in 2028, having just opened a prototype
production facility in Kanagawa, Japan. Quantumscape andVolkswagen have a joint venture that plans a pilot production line to-5%start in 2024. Samsung SDI began construction of a pilot solid-statebattery production line in March 2022, and aims to develop prototype
cells by 2025 and start mass production in 2027.

-10%

Despite the activity and announcements, major technical challenges
remain to be solved before ASSBs can make significant impacts.
Current state-of-the-art performance often relies on impracticalpressures to solve the contact problem, or on currently unscalable,
expensive production processes to reach viable performance.
Though progress is being made, ASSBs are not expected to have asignificant impact until after 2030.

-15%

-20%

IEA. All rights reserved.
Notes: STEPS =Stated Policies Scenario; APS = and Announced Pledges
Scenario. The percent of total metal demand reduction in the Constrained
Chemistry Case is relative to the Base Case including EV and non-EV
demand.

Solid-state batteries
All-solid-state batteries (ASSBs) are the anticipated next step-change
improvement in battery performance. ASSBs can enable the use of alithium metal anode which can result in battery energy densities
around 70% higher than the current best Li-ion batteries with graphite

PAGE | 57

EV batteries and supply chains

Global supply chains of EV batteries

Supply projections appear sufficient to meet metal demand in the Stated Policies Scenario…
Total demand and supply for lithium, nickel and cobalt, 2020 - 2030

kt

Lithium

NickelCobalt

1 000

8 000

1 000

750

6 000

750

500

4 000

500

250

2 000

250

0

0

0

2020
Supply2025

2030
NZE demand

2020

2025

2030

STEPS demand

2020

2025

2030

APS demand
IEA. All rights reserved.

Notes: NZE = Net Zero Emissions by 2050 Scenario; STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario. The NZE bar represents variability indemand if demand-side measures are taken to reduce battery and critical metal demand.
Sources: IEA analysis based on Benchmark Mineral Intelligence for supply capacity.

PAGE | 58

EV batteries and supply chains

Global supply chains of EV batteries…but more investment is required for the Announced Policies and Net Zero by 2050 scenarios
In comparing metal supply estimates by mining industry experts with
the IEA demand scenarios, it appears that EV battery metals demandin the Stated Policies Scenario will likely be met for all metals up to2025 if announced new supply comes online as scheduled. Whenlooking to 2030, the situation is more uncertain, but a continuation oftrends should generally be sufficient to meet demand for all metals if
all anticipated supply comes online, though with a small margin.
Nonetheless, this still requires a significant effort: dozens of mining
projects will have to enter the market and reach capacity on scheduleand tens of new mineral processing and precursor plants will have to

2 nickel whereas batteries require Class 1 or significant additional
processing of Class 2 nickel. Therefore, significant investments areneeded.
In the Constrained Chemistry Case, the demand for all metals will
decrease, in particular for nickel and cobalt. Nickel demand in the
Announced Pledges Scenario would be reduced to be the same asin the Stated Policies Scenario in 2030. For cobalt, the Announced
Pledges Scenario demand is met by projected supply, but theConstrained Chemistry Case would reduce the Announced Pledges
Scenario demand to 22% below supply estimates, a considerable
supply surplus. For lithium, this would reduce the gap between the
Announced Pledges Scenario demand and projected supply by 13%.

be commissioned. Also, in order to translate this into EV deployment,
tens of cathode and anode plants, gigafactories and EV production
plants are required.

Though the price of cobalt is rising and the supply of cobalt is highly
concentrated geographically and thus more vulnerable to supply
shocks, it is expected that in the long term cobalt supply will likely not
be as much of an issue as lithium and nickel. This is due to the trend

Demand for lithium will greatly exceed current supply projections by
2030 in the Announced Pledges Scenario. To meet climate and zero
emissions targets, additional investments will have to flow into themining industry. Lithium requires a 45% increase in demand in the
Announced Pledges Scenario compared to the Stated Policies
Scenario or a 33% increase from projected supply in 2030 – roughly
15 additional mines would be required on top of projected supply. For
nickel, demand in the Announced Pledges Scenario is just oversupply, however the total projected supply includes both Class 1 andof moving away from cobalt in cathode chemistries, coupled with the
expansion of recycling as cobalt is the most valuable battery metal
per kilogramme.
In the long term, recycling will contribute significantly to supply.
However, only small contributions from recycling are expected by

PAGE | 59

EV batteries and supply chains

Global supply chains of EV batteries

Secondary battery production from recycling and re-use, 2030

2030, particularly for lithium and nickel. From analysis of the dates of
expected retirement of EV fleets and their battery chemistrycompositions, there is less than 1% of total projected demand (in bothscenarios) available from recycling for lithium and nickel by 2030. For

kt

40

4%

35
30

cobalt there is a small contribution available from recycling, expected
at around 2% of total 2030 demand for both scenarios.

3%

25
20

2%

15
10

1%

5
0

Lithium

CobaltNickelLithium

STEPS

CobaltNickel0%

APS

Reuse in second-life batteries
Secondary production from recycled minerals
Share of recycled minerals in total demand

IEA. All rights reserved.
Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges
Scenario.

PAGE | 60

EV batteries and supply chains

Global supply chains of EV batteries

Demand side measures such as limiting the growth of battery size can help bridge the gap
Measures to lower metal demand in 2030 in the Net Zero Scenario
1 000

kt

kt

10 000

800

8 000

600

6 000

400

4 000

200

2 000

0

High

Low

High

Lithium
Non-EV demand

Low

0

High

CobaltSmaller Batteries

Low
NickelConstrained Chemistry

Supply in 2030
IEA. All rights reserved.

Notes: NZE = Net Zero Emissions by 2050 Scenario; STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario.
Sources: IEA analysis based on Benchmark Mineral Intelligence for supply capacity.

PAGE | 61

EV batteries and supply chains

Global supply chains of EV batteries

The Net Zero Emissions by 2050 pathway requires more supply than currently planned
The projected demand for battery metals in the Net Zero Emissions
by 2050 Scenario (Net Zero Scenario) is significantly higher thancurrent demand. Demand in this scenario in 2030 is projected toInnovative battery chemistries in the Net Zero Scenario scenario aredeveloped more rapidly, following an increase in investment for
innovation. For example, all-solid-state batteries are expected toincrease by 30% per year for lithium, 11% for nickel and 9% forcobalt. By comparison, supply of lithium in the past five years has
increased 6% per year, nickel by 5% and cobalt by 8%. Therefore,
meeting the Net Zero Scenario demand for electrification requires

enter the market earlier than in the Stated Policies Scenario. If
innovation focussed on minimising the material footprint in the Net
Zero Scenario, by following the Constrained Chemistries cathodemix, demand for the key battery metals would decrease by up to one-large investments in the supply of battery minerals – just as in allother clean energy technology sectors. However, actions can betaken to minimise demand by addressing two key levers: mineralthird.

intensity of batteries and average battery size per vehicle.
Average battery sizes increased by 60% between 2015 and 2021.
This reflects both increased average driving range and increased
average energy consumption, as a larger share of electric cars are
SUVs. Vehicles with more than 110 kWh batteries are already being
produced. In the coming years, if current trends continue, we expect
battery sizes to continue to increase by up to 30% in 2030. In the Net
Zero Scenario, this trend could be curbed by enacting policies that
discourage vehicles with extremely large batteries, for example bylinking incentives to battery sizes or, in the longer term, taxing EVs
with large batteries. If by 2030 battery sizes remained equal to today,
16% of incremental battery metal demand could be avoided.

PAGE | 62

In addition, the Net Zero Scenario investment in innovation may also
bring forward novel extraction and processing technologies, such as
DLE, clean HPAL and re-mining from mining waste, that can allcontribute to increasing supply.

EV batteries and supply chains

Global supply chains of EV batteries

Innovation can help bridge the gap between demand and supply of metals for batteries
Direct lithium extraction can increase production
from existing mines

Nevertheless, achieving robust selectivity and scaling up DLE
technologies remains challenging. For example, many DLE
technologies must be tuned to the conditions of the brine. DLE isan emerging process yet to be tested at scale, however, several
companies are leading in the development of DLE projects suchas POSCO, Standard Lithium and Vulcan Energy. There aremining companies looking to use DLE as well as companies

Direct lithium extraction (DLE) is a process largely in the pilot
stage today. It bypasses the time-intensive need to evaporate
the unconcentrated brine water and chemical removal of
impurities. Instead, DLE technologies directly extract lithiumfrom unconcentrated brine either through adsorption, ion
exchange or solvent extraction techniques. DLE relies on highselectivity technologies which can extract lithium from complex

developing DLE technology, with a number of joint ventures being
formed.

and varied brines and reject impurities.

Novel nickel routes can increase the variety ofsupply sources

As well as offering cost and lead time advantages, DLE hassustainability advantages and widens the pool of economicallyextractable lithium supply. For example, areas unsuitable forevaporation ponds such as lithium-rich geothermal brines, where
there is significant resource, such as the Salton Sea in California.
Environmental impacts can be considerably reduced compared
to conventional hard rock mining and evaporative pond

Batteries require Class 1 nickel, typically from sulphide deposits.
Most production growth in the near future, however, is comingfrom regions with significant laterite resources, which produce
Class 2 nickel, such as Indonesia and the Philippines.
There are novel technologies which can convert low grade laterite
resources into Class 1 nickel. HPAL (high-pressure acid leaching)is a form of hydrometallurgy that uses acid separation under hightemperature and pressure to produce nickel at Class 1 grade
suitable for battery applications.

processes.

PAGE | 63

EV batteries and supply chains

Global supply chains of EV batteries

HPAL however, comes with significant challenges,
predominantly due to cost and lead times. Capital costs for HPAL
projects typically are double that of conventional smelters foroxide ore and take about four to five years to reach capacity.

Another method being explored is the conversion of nickel pig iron(low grade 3-12% nickel) into an intermediate grade nickel matte(>50% concentration), a precursor to nickel sulphate used forbatteries. This would significantly increase the pool of potential

Recent projects have also suffered from major delays and cost
overruns. Nevertheless, projects are coming online with China
leading investment in HPAL projects, particularly in Indonesia.
Indonesia’s first HPAL battery nickel project, a joint venture

nickel able to be used in batteries, however, it is a highly
emissions-intensive process (four times more than HPAL) andmuch more than conventional sulphide production. Tsingshan,
the major Chinese steel producer, is pursuing this process andbetween Indonesian company Harita Group and Chinesecompany Ningbo Lygend Mining Co. started operating in 2021.
There are also concerns with the environmental impact of HPAL
as it often uses coal or oil-fired boilers for heat, thus emitting up
to three times more GHG emissions than production fromsulphide deposits. There are companies attempting to make
HPAL more sustainable such as Clean Teq, a company
developing a solar-powered HPAL project in Australia, wheresteam and heat are also recovered.

made its first shipment in 2022. The economics are uncertain withanother facility in New Caledonia having closed as it was too
expensive. Tsingshan is looking to utilise clean energy for its
operation to reduce the impact, however, the process uses a
significant amount of direct fuels, raising into question its
realisable potential for reducing emissions in line with othertechniques.

Re-mining from mining waste
Recovery from mining waste, refered to as re-mining, is a novel
process of extraction of valuable minerals and metals from minetailings, waste water and rock. This is a potentially significant
source of supply that so far has been unrealised. For example,
tailings for nickel and copper mining were 4 billion tonnes in 2017.
There are several start-ups focussing on this including the Rio
Tinto backed start-up Regeneration.

Mixed hydroxide precipitate (MHP) is becoming increasingly
important as an intermediate product produced from laterite,
which can be refined into nickel and cobalt sulphates needed forbatteries at low cost. MHP can also be processed into nickel andcobalt products from selective acid leaching, a process with alower environmental footprint. MHP, often produced from HPAL,
is becoming an important feedstock over nickel metal due to its
lower cost and the expected increase in availability.

PAGE | 64

This publication reflects the views of the IEA Secretariat but does notnecessarily reflect those of individual IEA member countries. The IEA
makes no representation or warranty, express or implied, in respect ofthe publication’s contents (including its completeness or accuracy)
and shall not be responsible for any use of, or reliance on, thepublication. Unless otherwise indicated, all material presented infigures and tables is derived from IEA data and analysis.

This publication and any map included herein are without prejudice tothe status of or sovereignty over any territory, to the delimitation ofinternational frontiers and boundaries and to the name of any
territory, city or area.

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