Supply chain consideration in the EV revolution

Abstract

In this paper, we look at the critical issues facing the supply chain of electric vehicles. We first start by looking at how electric mobility has grown and come a long way from its humble beginnings in the early 19th century. Thereafter we turn our focus on the EV battery. The first question which needs to be answered here is that why are batteries so important for an electric vehicle? While traditional cars compete on IC engines and transmission, electric vehicles compete on batteries. One of the most important factor people look for apart from cost when buying these vehicles is how far can the car run on a single charge, in other words, range. Range is a function of the energy which the battery can store. Low storage capacity leads to lower ranges and more frequent charging. Long charging times are another issue which has prevented an explosion of EV sales. However, things are changing. With millions of dollars being spent on research, new chargers have come up which require just 15 minutes. Furthermore, battery costs are declining constantly and have reduced from around $1,000 per kWh at the start of this decade to $227 in 2016.1 In the next 10 years all electric vehicles are expected to come on par with IC vehicles in terms of cost. This will spur a massive increase in electric vehicles with governments around the world giving massive incentives to both manufacturers and consumers. We will also look at the different battery technologies that exist and how they compare against each other. Post that we will look at the dominating battery technology currently used, which is the Li-ion batteries (LIB), and what are the constraint variables in its supply chain. To do this we look at the three most used metals to create a Li-ion battery, namely, Lithium, Nickel and Cobalt. We look at where these metals are found and mined. We also examine which companies are involved in their mining and who owns these mines. Finally, we move further downstream to the battery producers and look at some of the biggest LIB producers. We also look at the five biggest mega factories and where are they located. These mega factories are crucial to the success of EVs in the future and any issues in their supply chain need to be looked at critically.