The EV Revolution: Impacts on critical raw material supply chains
David Merriman Manager, Battery & Electric Vehicle Materials Division Disclaimer
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Key points to determine…
What is criticality? What materials are used?
Source: Roskill What is criticality? • Criticality is not real, it’s a concept of importance by the consumer (or study group…)
• There are many view points to consider; criticality is specific to:
- End-use application Vs. Vs.
- Regions Vs. Vs.
- Company Vs. Vs.
Source: Roskill Adversely affected What materials are used? Chassis alloys / Light-weighting • There are a large range of materials used in EVs, including:
EV Batteries Positively affected
• Cathode materials Cabling Electric Motors Focus on 3 main markets: • Anode materials • Lithium • Electrolyte • Foils • Cobalt • Rare Earths • Cables & connectors • Permanent magnet motors • Charging infrastructure • Glass pigmentation • Electronics • LCD screens Source: Roskill
Lithium supply chain
Brine Anode Anode precursor Material
Mineral Conversion Lithium Cathode Cathode Battery compounds precursor Material cell
Mineral Electrolyte Electrolyte Concentrate Purification material Material
Miners & Briners Processors Specialist Battery materials manufacturers Rechargeable batteries represented >50% demand in 2018
Lithium demand by end-use, 2005-2018
Source: Roskill Lithium-ion battery: Changing battery demands
• Portable electronics dominant ~90% 2010 • Automotive in its infancy • ESS yet to emerge
• Automotive applications dominant 2018 • Portable electronics remain significant ~25% • ESS represents 1% of MWh total
• Automotive applications form almost entire market 2025 • ESS and Power & motive represent ~3% • Portable electronics <5%
Source: Roskill Automotive: xEV sales to exceed ICEs by 2029
• xEV sales have grown by 26%py since 2010, compared to Total vehicle sale and xEV sales, 2005-2030 3% py in total vehicle sales (ICE + xEV) 125 60%
• 50% xEVs share will exceed ICE cars share by 2029. But ICE sales 100 will be peaking next year in 2020 (no further growth) 40% • Sales in 2018 reported xEVs to total 5.38M units. Market 75 penetration in 2018 was ~5.5% of xEVs 30% 50 Units) (M Sales • Roskill’s Automotive & Battery Materials model forecasts 20% growth in xEV sales of 29%py to 2025 25 10%
• Total vehicle sales to grow by 1.7%py over same period - 0% 2005 2010 2015 2020 2025 2030 • xEVs market penetration to reach 29% in 2025 and >50% HEV/EV Total vehicles HEV/EV % in 2029
Source: Roskill How has the dominance of xEVs changed the lithium supply chain?
Source: Roskill Cathode material requirements have shifted
• Greater energy density, power and safety requirements in automotive applications has caused a shift in cathode materials • LCO and LMO not suitable for automotive use, firstly the use of LFP (China) and then NMC and NCA cathodes • Changing raw material demands in rapidly growing market
Lithium Iron Phosphate (LFP)
Lithium Nickel Cobalt Manganese oxide (NMC)
Lithium Cobalt Lithium Manganese Lithium Nickel Cobalt Oxide (LCO) Oxide (LMO) Aluminium oxide (NCA)
Source: Roskill Higher energy-density materials favoured
• LMO and LFP used in first generation EVs, Cathode usage by type, (% market share) 2015-2025 though short-life and lower energy density 100%
were unfavourable. 90%
80%
• Higher-nickel NMC providing energy density 70%
(vehicle range) have been favoured, 60% supported by subsidies for EVs with longer ranges and consumers ‘range anxiety’ 50% 40%
30% • Shift to NMC 532 NMC 622 NMC 811 20%
10%
• Higher Ni cathodes require specific raw 0% materials, manufacturing conditions and 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 management systems LCO HE LCO NCA 9% Co NCA 3% Co LMO LFP NCM 111 NCM 523 NCM 622 NCM 811 NCM Other
Source: Roskill
LiOH required for the transition to High-Ni NMC & NCA
• Lithium carbonate used historically Cathode usage by type, (% market share) 2015-2025 because of price and availability. 100%
Largely used in production of LCO, 90% NMC 111 and LMO 80%
70%
• Higher-nickel cathode materials 60% (NCA, NMC 622 and NMC 811) require LiOH. Other cathode 50% chemistries (LFP, NMC 532) may 40% used either carbonate or hydroxide 30% 20% • New production capacity targeting 10% LiOH output, representing 75% of 0% new/expanded capacity in pipeline 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Li2CO3 Either LiOH
Source: Roskill
Lithium: Further expansions and new production required
1,600,000 Refined lithium supply-demand balance (t LCE) • Planned expansions at new producers
1,400,000 • Set-back and delays at new producers 1,200,000 and expansion may widen the ‘gulf of opportunity’ for new producers 1,000,000
800,000 • Deficit exceeding 100kt LCE by 2023 forecast, though capacity sufficient to 600,000 meet demand until 2028
400,000
200,000 • Further capacity expansions are expected at major processors - 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 • Over 100kt additional lithium production Ref. Supply Ref. Capacity Ref. Demand required each year to meet demand 200,000 growth - -200,000 • Significant investment in expansions and -400,000 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 new producers required
Source: Roskill Demand to increase multiple times in batteries
Li and Ni demand in batteries, 2018-2025 (Indexed 2018) Co and Mn demand in batteries, 2018-2025 (Indexed 2018) 300 600 280 550 260 500 240 450 220 400 350 200 300 180 250 160 200 140 150 120 100 100 2018 2019 2020 2021 2022 2023 2024 2025 2018 2019 2020 2021 2022 2023 2024 2025 Lithium Nickel Cobalt Manganese
• Lithium demand to increase 6x by 2025, with little opportunity for substitution • Nickel intensity of use increasing accelerating demand growth over 4x • Cobalt being designed out, though demand forecast to over 2x in years to 2025
Source: Roskill
Choice of cathode impacts raw material demand
Material composition of major types of cathode (% of weight)
NCA 3% Co
NCA 9% Co
NCM 811
NCM 622
NCM 523
NCM 111
LMO
LFP
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Li Ni Co Mn Al Fe P O
Source: Roskill Cobalt intensity of use decreases, though demand increases
Co demand in batteries by end-use, 2018-2028 (t Co) 250,000
200,000
150,000
100,000
50,000
- 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Automotive Portable Power & Motive ESS
Source: Roskill Cobalt sources are largely by-products of Cu and Ni
Source: Roskill Mine Production -2018
Source: Roskill OEMs are starting to lock in supply but risk appetites vary
Selected deals to procure cobalt, 2017 & 2018
Year Buyer Buyer type Country Source Source type Country
Easpring Cathode 2017 Material China Clean Teq Project Australia manufacturer Technology
Cathode Huayou 2018 POSCO Korea Producer DRC/China manufacturer Cobalt
Battery 2018 GEM China Glencore Producer DRC/other recycler
Huayou 2018 LG Chem Battery maker Korea Producer DRC/China Cobalt
Australian 2018 SK Innovation Battery maker Korea Project Australia Mines
2018 LG Chem Battery maker Korea Cobalt Blue Project Australia
Easpring Cathode Pacific Rim 2018 Material China Project Indonesia manufacturer Cobalt Technology CTT & Morocco & 2019 BWM OEM Europe Producer Glencore Australia
Source: Roskill Rare Earths – Electric motors
Permanent magnet motors Induction motors
• Nd-(Pr-Dy)-Fe-B • Electromagnets • Sm-Co • Ferrite
Source: General Motors, Roskill Electric vehicles – Without a motor its just an energy storage system
• Permanent magnet synchronous motors (PMSM) are the motor of choice in electric vehicle drivetrains (> 90%). • Currently, leading power-density permanent magnets are rare earth neodymium-iron-boron (NdFeB). • New motor/generator technologies are optimising the distribution of magnets in size-specific designs.
Comparison of motor efficiency Choice of motor technology in NEVs
100% 100%
90% 95% 80%
90% 70% 60% 85% 50% 40% 80% 30%
75% 20% Energy efficiency conversion Energy 10% 70% 0% 600 700 800 900 1000 1100 1200 1300 A-D E-F SUV RPM Automotive segments PMSM IM PMSM IM Source: Roskill Electric vehicles set to reshape the NdFeB (and REE) market
• Drivetrain motors require higher quality and larger permanent magnets compared to traditional applications • Pure battery EVs and LSEVs use more permanent magnets per motor than HEVs (Toyota Prius: 1.5kg NdFeB)
Drivetr ain (NEV… Drivetrain Wind (NEV) Drivetr turbines ain Other auto 10% and vehicle 8% Air-con (NEV) … 14% 8%
NdFeB Applications other NdFeB Consumer 29% elec. 31%
2018e 2019f 2020f 2021f 2022f 2023f 2024f 2025f 2026f 2027f 2028f 2029f NdFeB demand by NEV type
HEV PHEV EV standard EV performance 48V FCEV 12V LSEV Source: Roskill Reaction: Greater disparity in REE demand by element
• Visualising the relative performance of a suite of 15 elements in a rare earth world defined by neodymium.
40% >9kt 3 )
2 kt 20% 1 0% 0
La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Lu Y ( Balance Supply-demand balance (kt) Relative supply ratio (%) Source: Roskill Reaction: China reinforcing domestic NdFeB supply chain
• Chinese companies have significantly increased production capacity for NdFeB alloy and magnet production in 2018, creating latent capacity
• Despite this, companies such as Leexia Tungsten (Xiamen Tungsten), Yantai Zhenghai Magnets, Cixi Gongli Magnetic Industry and Tianjin Sheng Magnetic One all constructing new capacity
• Requirements for Nd, Pr and Dy increasing: • Domestic production • Rest of world producers • Recycling of magnet materials
• Opportunity of for ROW producers, though reluctance for Chinese involvement, little financing opportunities, processing knowledge and develop supply chains outside China
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