The development of batteries for electric vehicles has progressed much faster than experts and policymakers had anticipated. New research shows that the market is well equipped to cope with both raw material shortages and price increases. This raises questions about which materials are actually critical to the energy transition, according to the researchers.
A new study has analysed battery development in the electric vehicle sector over the past 15 years. It shows how various so-called critical raw materials have been replaced by other materials to manage changes in price or availability.
"The electric vehicle market seems able to commercialise new battery technologies quickly to secure production. Even though the volumes of materials required are rapidly increasing, this suggests that individual materials may not be as critical as we previously thought," says André Månberger, Associate Professor at the Division of Environmental and Energy Systems at Lund University.
Electric cars are now being used to an increasing extent: over a quarter of all new cars sold globally are electric. Thirty-nine countries have also surpassed a market share of ten per cent. The transition is happening particularly quickly in South-East Asia; in Vietnam, almost 40 per cent of all cars are electric.
Innovation leaps in battery technology
In the study, researchers Björn Nykvist, André Månberger, Lars J. Nilsson and the PhD student Oscar Gustafsson identify how battery technology for electric vehicles has undergone four innovation leaps since the early 2010s.
These technological leaps can be explained by fast innovation in batteries in terms of performance and functionality, but price increases for certain materials and material shortages also play a role. One example is how cobalt in batteries was replaced by nickel through the development of new technologies. Cobalt extraction struggled to keep pace as demand and prices rose quickly. Manufacturers also wanted to avoid the social and environmental impact associated with cobalt extraction.
Another example is how batteries produced using nickel-manganese-cobalt (NMC) minerals have begun to give way to batteries produced using lithium iron phosphate (LFP), which can be manufactured at lower costs and with fewer critical materials.
"If we look at these technological leaps, we can see that one technology dominates before being displaced by new innovations to which the market adapts. Today, only a quarter of all vehicles sold are electric, so there is good potential for more of these adjustments as we continue to transition," says Björn Nykvist, affiliated researcher at Lund University and Head of Division at Global Agendas, Climate, and Systems at the Stockholm Environment Institute.
The market is robust and capable of handling changes
According to the researchers, these changes show that the market for electric vehicles is quite robust and well equipped to handle changes in material supply. They point out that governments could therefore be more cautious about identifying certain materials as critical to the transition - particularly as innovation is happening so fast. Rather than focusing solely on new mining projects for certain minerals, they stress the need for a range of policy options to support the energy transition.
It is particularly important to promote cooperation across the entire battery manufacturing value chain. Today, for example, China dominates refinement of various materials, something that could also take place in the EU, they argue.
"Since the market seems capable of withstanding pressures, we believe that Sweden and other countries should focus more on forming international partnerships and trade alliances to support the sustainable import and export of raw materials," Björn Nykvist concludes.
