Will There Be Enough Nickel to Drive the EV Revolution?

11.07.17 | Blog | By:

While lithium and cobalt deservedly get a lot of the press, there is another metal that will also be changed forever by increasing penetration rates of EVs in the automobile market: nickel. This infographic from Visual Capitalist using data from North American Nickel  dives into nickel’s rapidly increasing role in lithium-ion battery chemistries, as well as interesting developments on the supply end of the spectrum.

Nickel is the most important metal by mass in the lithium-ion battery cathodes used by EV manufacturers – it makes up about 80% of an nickel cobalt aluminum (NCA) cathode, and about one-third of nickel manganese cobalt (NMC) or LMO (lithium maganese oxide)-NMC cathodes. More importantly, as battery formulations evolve, it’s expected that we’ll use more nickel, not less. Nickel over time is expected to make up 80% of the mass in both NCA and NMC cathodes.

Nickel, which is primarily used for the production of stainless steel, is already one of the world’s most important metal markets at over $20 billion in size. For this reason, how much the nickel market is affected by battery demand depends largely on EV penetration. According to the mining company Glencore, a shift of just 10% of the global car fleet to EVs would create demand for 400,000 tonnes of nickel in a 2 million tonne market. Glencore sees a nickel shortage as EV demand burgeons.

However, most nickel in the global supply chain is not actually suited for battery production. Today’s nickel supply comes from two very different types of deposits:

  • Nickel Laterites: Low grade, bulk-tonnage deposits that make up 62.4% of current production.
  • Nickel Sulfides: Higher grade, but rarer deposits that make up 37.5% of current production.

Many laterite deposits are used to produce nickel pig iron and ferronickel, which are cheap inputs to make Chinese stainless steel. Meanwhile, nickel sulfide deposits are used to make nickel metal as well as nickel sulfate. The latter salt, nickel sulfate, is what’s used primarily for electroplating and lithium-ion cathode material, and less than 10% of nickel supply is in sulfate form. Though mining giant BHP Billiton announced it would invest $43.2 million to build the world’s biggest nickel sulfate plant in Australia in August, much more nickel sulfate will be needed to support the EV market.

Courtesy of: Visual Capitalist
Tammy Klein is a consultant and strategic advisor providing market and policy intelligence and analysis on transportation fuels to the auto and oil industries, governments, and NGOs. She writes and advises on petroleum fuels, biofuels, alternative fuels, automotive fuels, and fuels policy.