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Global electric vehicle sales in 2019 exceeded in 2018, and EVs are expanding significantly as technology advances in the electrification of two/three-wheelers, buses and trucks and their markets grow. In recent years, government policies have also tended to encourage the adoption of electric vehicles in major auto markets. Therefore, the demand for automotive lithium-ion (Li-ion) batteries has also begun to rise rapidly. In 2021, according to Martins’ opinion in Electric car battery: An overview on global demand, recycling, and future approaches towards sustainability., global sales of BEV and PHEV vehicles will surpass sales of hybrid electric vehicles (HEVs), and battery demand will increase further as BEV and PHEV battery sizes increase.

The increase in battery demand drives the demand for critical materials. As has already been seen for lithium, mining and processing of these critical minerals will need to increase rapidly to support the energy transition, not only for EVs but more broadly to keep up with the pace of demand for clean energy technologies. Reducing the need for critical materials will also be important for supply chain sustainability, resilience, and security. (Rezvanizaniani et al., 2014) Accelerating innovation can help, such as through advanced battery technologies requiring smaller quantities of critical minerals, as well as measures to support uptake of vehicle models with optimized battery size and the development of battery recycling.

In recent years, alternatives to Li-ion batteries have been emerging, notably sodium-ion (Na-ion). This battery chemistry has the dual advantage of relying on lower cost materials than Li-ion, leading to cheaper batteries, and of completely avoiding the need for critical minerals. It is currently the only viable chemistry that does not contain lithium. (Arun et al., 2022) The Na-ion battery developed by China’s CATL is estimated to cost 30% less than an LFP battery. Conversely, Na-ion batteries do not have the same energy density as their Li-ion counterpart. This could make Na-ion relevant for urban vehicles with lower range, or for stationary storage, but could be more challenging to deploy in locations where consumers prioritize maximum range autonomy, or where charging is less accessible.

Analysts don’t anticipate a move away from lithium-ion batteries any time soon: their cost has plummeted so dramatically that they are likely to be the dominant technology for the foreseeable future. They are now 30 times cheaper than when they first entered the market as small, portable batteries in the early 1990s, even as their performance has improved. BNEF projects that the cost of a lithium-ion EV battery pack will fall below US$100 per kilowatt-hour by 2023. As a result, electric cars — which are still more expensive than conventional ones — should reach price parity by the mid-2020s. (Castelvecchi, 2021)