Photo: Nth Cycle
The global shift to electric vehicles (EVs) is accelerating, but a recent report by McKinsey warns of major difficulties in the supply chain of key battery components by 2030.
EV sales are expected to jump from 4.5 million units in 2023 to 28 million annually by the end of the decade. This unprecedented demand will put pressure on the supply of important materials such as lithium, high-purity manganese, and graphite.
Although lithium iron phosphate (LFP) batteries reduce reliance on rare earths such as cobalt and nickel, they still rely heavily on lithium, manganese, and graphite. The switch to LFP batteries provides some relief but does not eliminate imbalances in the supply chain, highlighting the need to continue to focus on sustainable sourcing.
Adding to the challenge, raw material mining and refining of these materials account for approximately 40% of total EV battery emissions. McKinsey's report emphasizes that reducing emissions from these processes is important.
“Finding materials from assets tied to polluting oil and energy sources could reduce pollution by 80% in the extraction and refining stages. This needs to be coupled with a strong focus on cost reduction given the current pressure on profits in the battery industry,” said Raphael Rettig, partner at McKinsey.
Small but important materials, such as high-purity manganese, also face increasing challenges. Currently, manganese contributes to about 4% of the emissions in a conventional lithium-nickel-manganese-cobalt (LI-NMC) battery. However, as LFP batteries gain popularity and larger materials such as lithium and nickel are decarbonized, the potential for manganese emissions has nearly doubled without targeted strategies to address the imbalance.
Toyota's recent $4.5 million grant from the US Department of Energy to develop sustainable EV batteries is a step toward addressing these challenges. However, it is clear that solving the wider supply chain issues will require a concerted effort from across the industry to balance demand with sustainable processes and reduce emissions. The way forward will define the EV industry's ability to meet climate goals while increasing productivity.
Read more: Toyota receives $4.5M DOE grant to improve EV battery sustainability
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