The Battery prices increased by almost 10% between April 2021 and April 2022. The rise in the prices of the main materials that compose them is responsible for this increase, which has cut the downward trend of previous years. Six are the most important materials that are part of batteries: lithium, nickel, cobalt, aluminum, copper and manganese. Each of these six metals has a share of responsibility in this rise, but how much?
The producer price index for battery manufacturing increased by 9.7% from April 2021 to April 2022, according to the FRED database of the Federal Reserve Bank of St. Louis. One factor that is having a fundamental impact on the current business scenario is the price of metals used in batteries. This is the evolution of prices that each of the six most important materials that form them have had.
Electric vehicle batteries can use lithium carbonate or lithium hydroxide. Their quantities are expressed in equivalent lithium carbonate (LCE) that contains both. Lithium carbonate is used for lithium ferrophosphate (LFP) batteries. Sales of electric vehicles using these batteries have accelerated in China so the lack of investment in production capacity due to the fall in prices suffered by this material until 2021 means that it is likely that be short of it for a few years.
Its high electrochemical potential and low weight make lithium an ideal anodic material. According to Benchmark Mineral Intelligence, as of May 16, lithium carbonate and lithium hydroxide prices increased 431.6% and 461.3% respectively, in relation to the previous year. Not surprisingly, Tesla CEO Elon Musk urged entrepreneurs to “get into the lithium business” last month during his first quarter financial results presentation.
According to the latest consultant report Adamas IntelligenceWorldwide, lithium batteries that use nickel-rich cathodes for their cells have been the most widely used by electric vehicle manufacturers. The 54% of the market share uses NCM (nickel, cobalt, manganese) and NCA (nickel, aluminum and cobalt) ternary chemicals with a nickel content above the 60% relative to the rest of the components.
The nickel price peaked at $48,241 a tonne on March 10, a 132.8% more than at the beginning of the year. Since then, prices have dropped considerably, but are still up by more than half year on year. And with nickel making up one-third to four-fifths of the cathode in NCM and NCA batteries, respectively, any price increase in the metal can have big implications for manufacturers.
Cobalt is a critical material in most of the battery chemistries currently used in both the consumer electronics and electric vehicle industries. It is often recovered as a by-product of the extraction of copper and nickelwhich means that the demand and prices of those other metals affect their availability.
cobalt prices up 80% year over year, increasing especially between mid-February and mid-March this year. The metal, which can represent up to a fifth of the weight of the cathode in lithium-ion batteries for electric vehicles, is considered “the greatest risk in the supply chain of materials for electric vehicles in the short and medium term”, according to the US State Department of Energy’s Office of Vehicle Technologies. There are environmental and human rights concerns associated with cobalt mining, especially in the Democratic Republic of the Congo, where about 60% of the world’s supply comes from .
The paper of aluminum in electric vehicle batteries it is primarily as a cathode current collector. However, in addition to this function, there are works that try to use it as a substitute for lithium since it contains much more energy density than lithium-ion batteries. Aluminum-air technology is very energy efficient being able to offer a range of 700 kilometers with a single kilogram of aluminum. For equal weight, the Aluminum has a higher energy density than gasoline..
The metal-air technology that would be used in them manages to produce electrical energy through the reaction of various metals with air. This type of battery is receiving a lot of attention from researchers for its extraordinary characteristics, particularly when combined with the use of aluminum. It is a very light, cheap and abundant metal and has no risk of explosions.
Aluminum prices have risen 13.14% compared to those collected last year.
Lithium-ion batteries typically use copper foil as the anode substrate. Copper prices peaked at $4.94 per pound on March 4, 2022, 11.8% more than at the beginning of January. However, prices have cooled off, falling as low as $4.10/lb in mid-May.
Manganese is used as a material in the cathode of NCM ternary batteries. However, there is another option: manganese-rich batteries. Tesla is exploring the properties of manganese for use in battery cells. According to Elon Musk, its CEO, “it is relatively easy to make a cathode that is two-thirds nickel and one-third manganese, which would allow us to produce 50% more cell volume with the same amount of nickel.” Their goal is use this chemistry as a complement to those based on nickel and iron.
The price of manganese, used as a cathode material in lithium-ion batteries (NMC), has risen 4.9% in the last year.