The electric vehicle market is dynamic and well equipped to handle price spikes and material shortages new research shows
André Månberger and his colleagues explore sustainability transitions, technological development and raw material criticality. The aim is to understand how criticality for different resources can develop in the future depending on how technologies are developed and commercialised, and how strategies can be developed to reduce criticality in the longer term.
André Månberger and his colleagues have recently identified how battery technologies used in electric vehicles have undergone three or four innovative leaps since they began to be used in the early 2010s.
They have recently assessed how battery technologies for electric vehicles have developed over the past fifteen years. It shows that these technologies are developing much faster than what many experts and policymakers forecasted – and suggests that the electric vehicle market is dynamic and well equipped to handle price spikes and material shortages.
“These results raise interesting questions in relation to criticality. The market seems to commercialise new technologies fast as some materials become scarcer or increase in price. While the volumes of material needed is rising fast, this does suggest that materials might be less critical than what was thought,” says Björn Nykvist, Head of Division – Global Agendas, Climate, and Systems at Stockholm Environment Institute, who led the study.
Innovative leaps drive change in material usage
Him and his colleagues, André Månberger and PhD student Oscar Gustafsson, identify how battery technologies used in electric vehicles have undergone three or four innovative leaps since they began to be used in the early 2010s. These shifts can be explained by increased innovation, price hikes for certain materials and material shortages. One such example is how cobalt in batteries was swapped for nickel since manufacturers faced multiple reasons to substitute the metal, leading to price increases. Cobalt mining proved difficult to scale and can have high social and environmental impacts. Another more recent example is how batteries produced with the minerals nickel manganese and cobalt (NMC) have started to give way for batteries produced with lithium iron phosphate (LFP), which can be produced with lower costs, and fewer scarce materials.
Björn Nykvist highlights that the shifts in materials for batteries show that the market is more robust than what many previously thought.
“If you look at these shifts, we can see that one technology dominates, but then innovation break through and the market switches. As only one quarter of all vehicles sold globally are electric, there is opportunity to have additional shifts as we continue to transition,” says Andre Månberger, senior lecturer at Environmental and Energy Systems Studies at Lund University, and leader for work package one.
Market is robust and able to handle changes in critical raw material access
They further note how these shifts suggest that the electric vehicle market is quite robust, and well able to handle changes in critical raw material access; underscoring how states should be more careful in identifying a material as critical – especially as innovation moves fast. Rather than narrowly focusing on new mining projects for certain minerals, they emphasise the need for many policy options to support the energy transition.
“Since the market can handle volatility, states could do well by forming international collaborations and trade alliances to support sustainable import and export of critical raw materials,” says Björn Nykvist.
He adds: “This includes collaborating across the whole value chain, especially when it comes to refinement processes, which now is completely dominated by China.”
Another path forward is to invest in research. Both on new battery technologies and on improving material efficiency of existing batteries – to reduce the need for critical raw materials. Long term it is also important to develop ways to better recycle materials.
New research focus: the production of critical raw materials and lithium
Within the work package, they have also started to explore the production of critical raw materials, with a specific focus on lithium; where is lithium produced; what companies own different mines; and what possibilities are there for countries to become more self-sufficient and rapidly increase extraction?
“Lithium is one of the minerals that is currently very challenging to substitute due to its high electrochemical potential. If we can understand lithium production and ownership patterns better, we can also identify ways to ease criticality for different countries,” says André Månberger.