While new battery chemistries are emerging, nickel and cobalt are likely to remain important for longer-range EVs and many non-battery uses.
Nickel and cobalt are used in many but not all battery chemistries. Today, they are mainly used in lithium, nickel, manganese, cobalt oxides (NMC), and lithium nickel, cobalt, aluminum, and oxides (NCA). Lithium iron phosphate batteries (LFP) are popular in China and do not use nickel or cobalt. However, LFP batteries are also significantly heavier, resulting in less range in an EV. Manganese-rich NMC could be a cheap alternative to LFP/LMFP, avoiding dependency on Chinese supply chains without sacrificing range. Cheaper, sustainably mined Cobalt from deep sea minerals would make high-voltage mid-nickel NMC an additional alternative. Nickel and cobalt are also used in many non-battery energy transition applications, including solar, wind, and nuclear power.
External industry analysts, such as Roland Berger, Benchmark Mineral Intelligence, etc., forecast that L(M)FP will account for around 35% of North American EV batteries in 2030. North American EVs will also use nickel-based (NMC) and iron-based (LFP) batteries. LFP is better for small pack sizes and cheaper vehicles, which are very popular in China. NMC has higher energy density and is best for long-range vehicles with bigger pack sizes.
LFP is primarily a Chinese technology today, so North America has no volume manufacturing. If you buy a car with Chinese batteries, you do not qualify for the Inflation Reduction Act (IRA)’s $7,500 tax rebate because they contain materials from a “foreign entity of concern.” For example, the lowest-cost Model 3 Teslas, which use LFP batteries currently do not qualify for the credit,but the long-range vehicles do qualify, making them cheaper on an after-tax basis than the LFP-based vehicles and offering almost 100 more miles of range. LFP also has a very low recycling value. NMC has large recycling values; if you factor in the end-of-life recycling value, NMC is cost-competitive.
Finally, while additional battery chemistries are being developed today, some of which will not require nickel and cobalt, they are unlikely to make a significant impact on climate goals in the next one to two decades. It typically takes 20 years after a new battery chemistry is invented before a Western automotive manufacturer deploys it at scale. Western automotive manufacturers need many years of samples from the volume production factory before the battery cells will be qualified.
For more details, see our blog post, “Inconvenient Facts About LFP Batteries”.