Battery supply chain disruptions are causing serious problems for electric vehicle (EV) makers, electronics manufacturers, and energy storage companies. The demand for batteries is skyrocketing, but critical materials like lithium, nickel, cobalt, and graphite are in short supply. This has led to rising costs, production delays, and geopolitical challenges.
1. Global lithium prices surged over 500% from 2021 to 2022 before stabilizing in 2023
Lithium is a key ingredient in modern batteries, but its price has been highly volatile. Between 2021 and 2022, lithium prices skyrocketed due to increasing demand and supply chain issues. While prices have stabilized somewhat in 2023, they remain much higher than pre-2021 levels.
Actionable Insight:
Companies should invest in lithium recycling programs to reduce reliance on newly mined lithium. Additionally, securing long-term contracts with lithium suppliers can provide price stability.
2. Nickel prices spiked by 250% in early 2022 due to supply constraints and geopolitical issues
Nickel is another critical battery material, and its price saw a huge surge in early 2022, largely due to supply chain disruptions and geopolitical tensions, particularly involving Russia, a major nickel producer.
Actionable Insight:
To mitigate risks, battery makers should diversify their nickel sourcing and explore alternatives like lithium iron phosphate (LFP) batteries, which do not require nickel.
3. Cobalt production is expected to fall short by 20% of projected demand by 2030
Cobalt is a major component in many high-energy-density batteries, but production is not keeping up with demand. With the expected shortfall, battery makers need to plan for supply gaps.
Actionable Insight:
Manufacturers should look into cobalt-free battery technologies, such as LFP and manganese-based batteries. Additionally, developing partnerships with cobalt recyclers will be crucial in the future.
4. China controls over 80% of global battery-grade lithium hydroxide processing
Even though lithium is mined in several countries, most of the world’s battery-grade lithium is processed in China. This makes battery manufacturers highly dependent on China’s supply chain.
Actionable Insight:
Companies should support domestic lithium processing initiatives in North America and Europe to reduce dependence on China.
5. Russia accounts for nearly 20% of the world’s high-grade nickel supply
Russia plays a significant role in the nickel market. However, geopolitical tensions have made it difficult for Western companies to rely on Russian nickel.
Actionable Insight:
Battery manufacturers should diversify their sourcing, investing in nickel mining projects in Canada, Australia, and Indonesia.
6. Global battery demand is forecasted to grow at a 25-30% CAGR through 2030
With the rise of EVs and renewable energy storage, battery demand is expected to skyrocket. However, material shortages could slow down production.
Actionable Insight:
Companies need to secure raw material contracts in advance and explore new battery chemistries that rely on more abundant materials.
7. By 2025, battery production costs are expected to rise by up to 40% due to raw material inflation
As raw materials become scarcer, battery prices are increasing, making EVs and other battery-powered products more expensive.
Actionable Insight:
Battery producers should streamline their supply chains and explore more cost-effective materials to keep prices under control.
8. Over 60% of the world’s cobalt comes from the Democratic Republic of Congo
Cobalt mining is highly concentrated in the Democratic Republic of Congo (DRC), a country with significant geopolitical and ethical challenges.
Actionable Insight:
Companies should prioritize ethical sourcing and support supply chain transparency to ensure sustainable cobalt mining.
9. Graphite supply faces a 30% deficit by 2030 due to high battery-grade purity requirements
Graphite is essential for battery anodes, but not all graphite is suitable for use in batteries. The growing demand for high-purity graphite is creating a supply gap.
Actionable Insight:
Investing in synthetic graphite production and recycling graphite from used batteries can help bridge the supply gap.
10. EV manufacturers report a 6-12 month delay in battery deliveries due to supply constraints
Battery supply chain disruptions have caused long wait times for manufacturers, slowing down EV production.
Actionable Insight:
Automakers should diversify their battery suppliers and invest in in-house battery manufacturing to reduce dependence on third parties.
11. China’s export restrictions on graphite (2023) impact 35% of global EV production
China recently imposed restrictions on graphite exports, creating further supply chain challenges for EV makers worldwide.
Actionable Insight:
Companies should ramp up domestic graphite production and seek alternative suppliers in Africa and North America.
12. Recycling could provide up to 20% of the battery materials supply by 2035
Battery recycling is becoming a major opportunity to address material shortages.
Actionable Insight:
Companies should invest in closed-loop battery recycling systems to recover valuable materials.
13. US lithium-ion battery production is expected to grow fivefold by 2030
The US is investing heavily in domestic battery production, aiming to reduce reliance on foreign suppliers.
Actionable Insight:
Companies should take advantage of government incentives to build local battery production facilities.
14. The EU aims to localize 70% of its battery supply chain by 2030
Europe is making efforts to become self-sufficient in battery production by developing local supply chains.
Actionable Insight:
Companies should partner with European battery material suppliers to secure stable supply.
15. Battery-grade lithium refining capacity in the US is less than 5% of global output
The US still lags behind in lithium refining, creating a dependency on foreign refiners.
Actionable Insight:
Companies should support domestic lithium refining projects to strengthen local supply chains.
16. Over 50% of new mining projects for battery metals are facing permitting delays
Many new mines are struggling to get government approvals, slowing down raw material production.
Actionable Insight:
Companies should engage with policymakers to streamline permitting processes for new mines.
17. Global lithium demand is expected to triple by 2035
As EV adoption grows, lithium demand will continue to rise.
Actionable Insight:
Companies should secure long-term lithium supply contracts now to avoid future price spikes.
18. The cost of lithium-ion batteries increased by over 10% in 2022, the first rise in a decade
Battery prices had been falling for years, but rising material costs reversed this trend in 2022.
Actionable Insight:
Companies should explore alternative battery chemistries that reduce reliance on expensive materials.
19. By 2040, 75% of lithium demand will come from electric vehicles
The electric vehicle (EV) market is growing rapidly, and by 2040, three-fourths of all lithium demand will be driven by EV production. This puts immense pressure on lithium supply chains, as demand is expected to outstrip supply unless major changes are made.
Actionable Insight:
Battery makers should look into lithium alternatives such as sodium-ion batteries, which are gaining traction due to their cost-effectiveness and abundance. Automakers should also support lithium recycling efforts to reduce dependency on newly mined lithium.
20. Battery pack prices could exceed $150/kWh if material shortages persist
Battery costs have been decreasing for years, but material shortages could push prices back up, potentially exceeding $150 per kilowatt-hour. This would slow down EV adoption by making them more expensive for consumers.
Actionable Insight:
Manufacturers should focus on reducing waste in the production process, optimizing battery design, and securing long-term material contracts to stabilize costs.
21. China’s lithium reserves account for only 6% of the global total, despite its dominance in processing
China dominates battery material processing, yet it holds only a small fraction of the world’s lithium reserves. This makes its supply chain vulnerable to external mining disruptions.
Actionable Insight:
Countries outside of China should expand domestic lithium mining efforts and build local refining capabilities to reduce dependency on Chinese processing.
22. Recycled lithium could supply up to 25% of total lithium demand by 2050
Recycling is a key solution to the lithium shortage. By 2050, one-fourth of all lithium demand could be met through recycling efforts, significantly reducing the need for new mining projects.
Actionable Insight:
Investing in lithium battery recycling technology now will pay off in the long run. Governments and private companies should work together to create incentives for large-scale battery recycling.
23. Gigafactories under construction in Europe and North America could face a 30% raw material shortfall
As battery gigafactories are being built in Western countries, they are already facing material shortages that could reduce their production capacity by nearly a third.
Actionable Insight:
Battery makers should establish supply chain agreements with multiple sources and explore partnerships with mining companies to ensure a steady supply of raw materials.
24. The US Inflation Reduction Act (IRA) aims to reduce reliance on China by offering $369 billion in clean energy incentives
The US government is taking steps to boost domestic battery production and reduce reliance on China. The IRA provides substantial funding for clean energy initiatives, including domestic mining and battery manufacturing.
Actionable Insight:
Battery companies should leverage these incentives to build local production facilities, secure funding for research, and invest in supply chain diversification.
25. 70% of global battery manufacturing capacity is located in China
The world’s battery production is highly concentrated in China, making global supply chains vulnerable to Chinese trade policies, export restrictions, and geopolitical risks.
Actionable Insight:
Manufacturers should diversify their supply chains by establishing battery plants in North America, Europe, and other Asian countries such as India and Indonesia.
26. Cobalt-free battery chemistries (LFP) have grown from 6% to 35% market share in just three years
Lithium iron phosphate (LFP) batteries, which do not require cobalt, are gaining popularity. In just three years, their market share has increased significantly as companies move away from cobalt due to ethical and supply chain concerns.
Actionable Insight:
Investing in LFP battery technology and improving its energy density will help reduce dependency on cobalt while maintaining battery performance.
27. The average lead time for lithium mine development is over 5 years
Mining lithium is not an overnight process. It takes more than five years on average to develop a new lithium mine, making it difficult to quickly ramp up supply when demand spikes.
Actionable Insight:
Companies should invest in early-stage lithium mining projects now to ensure a steady supply in the future. Governments should also streamline permitting processes to speed up mine development.
28. EV battery recycling capacity in the US is expected to grow tenfold by 2030
Recycling is becoming a top priority, and the US is set to increase its battery recycling capacity significantly by the end of the decade. This will help recover valuable materials and reduce reliance on newly mined resources.
Actionable Insight:
Companies should establish partnerships with battery recyclers and develop closed-loop recycling systems to maximize material recovery.
29. Geopolitical instability in key mining regions could affect over 40% of the battery metal supply
Many of the world’s key battery materials come from regions prone to political instability, including the Democratic Republic of Congo, Russia, and parts of South America. This makes supply chains vulnerable to disruptions.
Actionable Insight:
To mitigate risks, companies should source materials from politically stable regions and invest in alternative battery chemistries that rely on more widely available materials.
30. Global EV production targets could face a 30-40% shortfall by 2030 due to battery material constraints
EV production is expected to grow exponentially, but battery material shortages could prevent automakers from meeting their ambitious targets.
Actionable Insight:
Automakers should secure long-term supply agreements with mining companies and battery producers. They should also invest in research for alternative energy storage technologies such as solid-state batteries and hydrogen fuel cells.
wrapping it up
Battery supply chain disruptions are no longer a temporary issue—they are a defining challenge for the future of clean energy, electric vehicles, and electronics manufacturing.
The rapid rise in demand for lithium, nickel, cobalt, and graphite has exposed serious vulnerabilities in the global supply chain. If these issues are not addressed, production delays, rising costs, and market instability will continue to hinder progress.
