Supply Risk Assessment And Coping Strategy Analysis For Full Industry Chain Of Lithium Battery-related Critical Materials

Driven by the burgeoning global electric vehicle market,there has been a significant increase in demand for critical battery materials such as lithium,cobalt,and nickel.This escalating demand has underscored potential supply risks,including highly concentrated supply and severe environmental and social impacts within the critical material industrial chain.These issues have propagated an imbalance between raw material supply and demand and led to considerable price volatility,thereby presenting formidable challenges to the progression towards transportation electrification.Addressing these challenges necessitates a precise depiction of the material metabolism across the entire industrial chain of lithium batteries,the effective identification of critical material supply risks,and the implementation of comprehensive resource management strategies.The following work was carried out in this study.(1)This study introduces a tradelinked material flow analysis method,quantitatively tracking the social metabolic flow of critical materials for lithium batteries across 240 countries and regions from 1994-2021,with a focus on lithium.(2)This study develops a supply-side risk quantification model based on the Herfindahl-Hirschman index in conjunction with the World Bank Worldwide Governance Indicator,and a demand-side risk quantification model based on the novel index of resource competition.(3)A bottom-up,technology-mixed intergrated assessment model has been established,which uses demand growth,market structure innovation,and technological progress as multiple scenario inputs.This model elucidates the dynamic evolution of supply risks pertaining to critical materials for lithium batteries from two perspectives: exogenous impacts and endogenous market drivers.Results indicate that(1)the global lithium metabolic flow is characterized by“extensive final consumption,highly concentrated flow,and clear division of labor among countries”.Global lithium production and trade flow have increased 9 times and 17 times,respectively,from 1994 to 2021.Over 80% of the lithium metabolic flow is concentrated in the top five supply countries including China,Australia,Chile,etc.(2)The supply-side risk index for the downstream manufacturing stage of critical materials for lithium batteries is 10% and 15% higher than that of the upstream refining and mining stages,respectively.The supply-side risk of cobalt industry chain is the most pronounced.The primary source of demand-side risk stems from the intense competition within production of lithium hydroxide,lithium batteries and lithium carbonate.(3)Under exogenous shock by the COVID-19 pandemic,lithium minerals emerge as the most critical source of risk.The supply constraint caused by lithium minerals will make the releasing efficiency of existing capacity and the building efficiency of new capacity of lithium batteries decrease by 14% and 18%,respectively.The persistent effect of these impacts could cause a 19%drop in global electric vehicle sales in 2030,compared to the baseline scenario.The endogenous market-driven supply risk is primarily the price volatility induced by the discordance between supply and demand growth rates.Global supply from 71 lithium production projects will reach 325 kiloton lithium metallic equivalents in 2025,exceeding demand by 13%-48%.This surplus will effectively temper the lithium price volatility that erupted in 2021.To tackle supply risk of critical battery materials,several strategies are recommendated to be implemented,including the establishment of an industry information sharing mechanism to improve cathode material utilization efficiency,the improvement of the lithium recycling system to diversify supply sources,and the construction of an international trading platform for critical lithium battery materials with lithium resources as the core to mitigate endogenous market-driven risk.