With limited sources of raw materials for batteries, such as lithium, cobalt, and nickel, a disruption in the supply of any of these materials can cause battery production to grind to a halt. The economic impact of raw material shortages in the battery industry can be significant.
This article focuses on three key measures for preventing or responding to EV battery shortages: industrialization and scale-up of gigafactories, strategies to find and retain talent, and establishment of a robust and efficient supply chain.
But it seems that, in our rush to escape the use of carbon fuels, we have replaced one scarce resource for another, with Tesla reporting that they believe global shortages of these vital battery components are on the way. Why are these minerals in short supply?
Mitigation will require increased focus on vertical integration and strategic partnerships throughout the supply chain, as well as supply chain localization and closed-loop battery recycling. Automotive players have to successfully manage supply chain risk for lithium-ion batteries to meet the increased demand in electric vehicles.
Battery manufacturers and supply chain providers have immense potential to revolutionize the industry by diversifying their sources of battery raw material, investing in sustainable recycling and reuse of batteries, and supporting the development of innovative and emerging battery chemistries.
In fact, the battery supply chain risks facing a situation similar to the current semiconductor chip shortage, where demand growth has outstripped capital investment in new supply. Furthermore, environmental, social, and governance (ESG) factors will play a more significant role—raising another set of issues that companies need to address.
Recycling can''t really solve the shortage of raw materials for lithium-ion batteries any time soon. But that doesn''t mean that battery recycling isn''t an exciting and high growth business. Because it is. Because there''s still going to have to be a …