• Electric Vehicles
  • Battery Manufacturers
  • Second-Life Batteries
  • Supply Chain

High Demand for EV Batteries Requires Supply Solutions

Maria Chavez
May 06, 2021

Guidehouse Insights

In the US, increased demand for EVs is backed by consumer interest, environmental advocates, and the federal government’s efforts to ramp up use of clean energy technologies. Unfortunately, the US faces an uphill climb when it comes to finding enough supplies to match the demand for EV batteries.

As it stands, US production of EV batteries will be unable to match the forecast volume of EV sales. Although there have been calls by the Biden administration to prioritize manufacturing, current domestic manufacturing capacity is not equipped to fulfill that demand. This stems from the number of battery manufacturing plants and the raw material mining and refining capacity in the US. Despite these hurdles, the battery and raw materials industry is forging ahead with ambitious goals to increase manufacturing capabilities and create innovative solutions for how to meet demand.

Creative Solutions for Supply Concerns Are Abundant

There are a number of efforts attempting to address the supply chain issue. Some focus on the upstream side of the supply chain (sourcing raw materials) while others are exploring options to reuse or recycle materials from used EV batteries. On the upstream side, there are companies like DeepGreen Metals Inc., which is aiming to source valuable battery materials like cobalt and nickel from mineral nodules on the sea floor. DeepGreen Metals claims that this method of deep sea mining can deliver higher yields of materials with fewer carbon emissions. This solution could present an otherwise unexplored source for battery materials; however, the unknown environmental impacts that come from potential disturbances to ocean ecosystems are a drawback.

Some companies are turning to the downstream side of battery manufacturing. One method is to scrap old batteries for their materials, allowing for new products to be made without additional sourcing of raw minerals. Exsolve Recycling Technologies has gone a step further by aiming to mine industrial waste (which is usually exported outside the US to countries like China) for battery materials that can be recycled into new systems. The battery industry is also making a concerted effort to increase the use of second-life batteries, which are used EV batteries that are repurposed for other energy storage applications. EV makers such as Nissan are even repurposing their used EV batteries to power automated vehicles for Nissan factory operations. Emerging partnerships like Redwood Materials and Proterra are also making it so that batteries can be recycled more efficiently. 

Which Solution Is the Most Promising?

At the moment, there isn’t one right answer to supply chain challenges. It’s promising to see a number of diverse solutions that aim to address these issues at every level of the supply chain. However, the most successful result may come from whichever method or company can gain the most traction in the battery industry and also offer cost-effective solutions. For now, the most concerted efforts still seem to be around battery system manufacturing plants, but as attention to the whole side of the supply chain deepens, the industry may see demand for both upstream and downstream solutions. For the sake of a green and sustainable economy, it would be great to see a solution that offers a lower environmental impact and can sustainably supply materials and battery systems to the desired applications.