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Nickel: The Secret Driver of the Battery Revolution

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Nickel: The Secret Driver of the Battery Revolution

Nickel: The Secret Driver of the Battery Revolution

Commodity markets are being turned upside down by the EV revolution.

But while lithium and cobalt deservedly get a lot of the press, there is another metal that will also be changed forever by increasing penetration rates of EVs in the automobile market: nickel.

Today’s infographic comes to us from North American Nickel and it dives into nickel’s rapidly increasing role in lithium-ion battery chemistries, as well as interesting developments on the supply end of the spectrum.

Nickel’s Vital Role

Nickel’s role in lithium-ion batteries may still be underappreciated for now, but certainly one person familiar with the situation has been vocal about the metal’s importance.

Our cells should be called Nickel-Graphite, because primarily the cathode is nickel and the anode side is graphite with silicon oxide.

– Elon Musk, Tesla CEO and co-founder

Indeed, nickel is the most important metal by mass in the lithium-ion battery cathodes used by EV manufacturers – it makes up about 80% of an NCA cathode, and about one-third of NMC or LMO-NMC cathodes. More importantly, as battery formulations evolve, it’s expected that we’ll use more nickel, not less.

According to UBS, in their recent report on tearing down a Chevy Bolt, here is how NMC cathodes are expected to evolve:

CathodeYearNickelManganeseCobalt
NMCPresent33%33%33%
NMC201860%20%20%
NMC202080%10%10%

The end result? In time, nickel will make up 80% of the mass in both NCA and NMC cathodes, used by companies like Tesla and Chevrolet.

Impact on the Nickel Market

Nickel, which is primarily used for the production of stainless steel, is already one of the world’s most important metal markets at over $20 billion in size. For this reason, how much the nickel market is affected by battery demand depends largely on EV penetration.

EVs currently constitute about 1% of auto demand – this translates to 70,000 tonnes of nickel demand, about 3% of the total market. However, as EV penetration goes up, nickel demand increases rapidly as well.

A shift of just 10% of the global car fleet to EVs would create demand for 400,000 tonnes of nickel, in a 2 million tonne market. Glencore sees nickel shortage as EV demand burgeons.

– Ivan Glasenberg, Glencore CEO

The Supply Kicker

Even though much more nickel will be needed for lithium-ion batteries, there is an interesting wrinkle in that equation: most nickel in the global supply chain is not actually suited for battery production.

Today’s nickel supply comes from two very different types of deposits:

  • Nickel Laterites: Low grade, bulk-tonnage deposits that make up 62.4% of current production.
  • Nickel Sulfides: Higher grade, but rarer deposits that make up 37.5% of current production.

Many laterite deposits are used to produce nickel pig iron and ferronickel, which are cheap inputs to make Chinese stainless steel. Meanwhile, nickel sulfide deposits are used to make nickel metal as well as nickel sulfate. The latter salt, nickel sulfate, is what’s used primarily for electroplating and lithium-ion cathode material, and less than 10% of nickel supply is in sulfate form.

Not surprisingly, major mining companies see this as an opportunity. In August 2017, mining giant BHP Billiton announced it would invest $43.2 million to build the world’s biggest nickel sulfate plant in Australia.

But even investments like this may not be enough to capture rising demand for nickel sulfate.

Although the capacity to produce nickel sulfate is expanding rapidly, we cannot yet identify enough nickel sulfate capacity to feed the projected battery forecasts.

– Wood Mackenzie

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Batteries

4 Benefits of LFP Batteries for EVs

LFP batteries are gaining popularity in EVs, with brands like Tesla and Ford increasingly adopting this technology due to their benefits.

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The following content is sponsored by First Phosphate

LFP Batteries for Electric Vehicles

Even though the technology behind EVs has evolved significantly over the past decade, batteries have always been a critical component. 

Lithium iron phosphate (LFP) batteries are becoming an increasingly popular choice for standard-range EVs, with major automotive producers like Tesla and Ford introducing LFP-powered vehicles into their catalog. 

In this infographic, our sponsor First Phosphate highlights the advantages of using LFP cathode batteries in EVs.

Benefit 1: Safety

LFP batteries are among the safest types of lithium-ion batteries, with a low risk of overheating and catching fire.

These batteries are less prone to thermal runaway and do not release oxygen if they catch fire, making them safer than other lithium-ion batteries.

Benefit 2: Long Life Cycle

LFP batteries have a longer lifespan than other types of lithium-ion batteries due to their low degradation rate. Meaning they can be charged quickly without significant battery damage, therefore leading to a longer lifespan.

LFP batteries can also withstand a larger number of charge and discharge cycles, meaning they can last longer before needing to be replaced.

Benefit 3: Cost-Effective

The materials used to produce LFP batteries are also relatively cheap compared to other types of lithium-ion batteries.

The main cathode materials used in LFP batteries are iron and phosphate, and they are in relative abundance in contrast to other battery metals. This makes them a cost-effective option for a variety of energy storage applications.

Benefit 4: Environmentally Sustainable

LFP batteries are environmentally sustainable because they are non-toxic and do not contain harmful heavy metals such as cobalt or nickel.

The materials used in these batteries are easier to source ethically, which makes them a more sustainable option than other types of lithium-ion batteries.

What’s Inside the Battery?

Most EVs utilize battery packs consisting of multiple individual battery cells. Similar to other types of lithium-ion batteries, LFP battery cells are made up of several components.

Cathode43%
Anode31%
Electrolyte20%
Cell Container4%
Separator2%

The cathode is the battery’s positive electrode and impacts its performance. It determines aspects such as energy capacity, charging and discharging speed, and the risk of combustion.

In LFP batteries, the cathode composition consists of three elements.

Phosphate 61%
Iron35%
Lithium 4%

Today, these batteries are becoming increasingly popular in standard-range EV models. LFP market share has significantly increased, reaching its highest share in the past decade at 30% of the market in 2022, according to the International Energy Agency (IEA).

First Phosphate is a mineral development company fully dedicated to extracting and purifying phosphate for the production of cathode active material for the LFP battery industry.

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