An optimist’s guide to the EV battery mining challenge

I hear the same refrain from climate advocates and fossil-fuel boosters: Whether you like electric vehicles or not, mining all the minerals needed for those batteries is going to be a problem. People worry that we’ll run out of lithium, or skyrocketing demand will push prices through the roof, or the battery boom will fuel environmental devastation and human suffering around the world.

An intriguing new report from climate think tank RMI suggests that many of those concerns are overblown, and that the materials EVs rely on are in fact an asset — not a hindrance.

“One of the biggest things people hold against EVs might turn out to be one of its biggest benefits in the long run,” said report coauthor Daan Walter, a principal on RMI’s strategy team. ​“Battery minerals have a tremendous benefit over oil, and that’s that you can reuse them.”

Transportation generates more planet-warming emissions than any other sector in the U.S. economy, and electrification offers a clear path to cleaning it up (one that can complement visions of more walkable, transit-friendly development). Battery-based vehicles already have demonstrated rapid uptake with consumers, rising from paltry sales a decade ago to an expected 20 percent of new car sales globally this year.

But the report’s authors found there’s evidence to suggest that battery chemistry innovations, energy density improvements, and recycling have already helped limit demand for battery minerals in spite of this rapid growth — and that further improvements can reduce it even more. And, contrary to some fears, the world has more than enough minerals to meet projected EV needs.

If countries continue to build out battery-recycling infrastructure alongside the growth of EV production, global demand for new lithium mining could peak as soon as 2038, with nickel and cobalt peaking even sooner, the report says. Its authors, including climate futurist Kingsmill Bond, envision a scenario in which new mining for battery materials can basically stop by 2050, as battery recycling meets demand.

In this fully realized circular battery economy, the world must extract a total of 125 million tons of battery minerals — a sum that, while hefty, is actually 17 times smaller than the oil currently harvested every year to fuel road transport. Put another way, to supply the world with all the battery minerals it needs in perpetuity would cost about $1 trillion at today’s prices. The current fossil-fueled transport system racks up nearly $1 trillion in oil extraction costs every year. By those metrics, the switch to battery vehicles looks both easier and cheaper than the status quo.

Of course, things rarely play out in the world as envisioned in crisp futuristic studies. Some of the dynamics that RMI anticipates are already happening and well documented; others rely on a bit more faith in humanity’s foresight and competence. With an eye to what’s most realistic and what remains to be proved, here’s a rundown of the reasons to stop worrying and learn to love the EV.

We’ve already innovated our way out of significant mineral demand

There’s good reason to expect technological innovation will make it easier and less disruptive to meet demand for battery minerals, because it already has.

The battery industry is advancing along many fronts simultaneously. It’s pumping out more batteries each year (Tesla just doubled second-quarter battery pack shipments compared to one year ago) while also tweaking the chemistry inside those batteries, squeezing more energy into each battery cell and figuring out how to recycle valuable materials.

The industry’s work around cobalt is especially notable. A decade ago, EV manufacturers favored the lithium-nickel-manganese–cobalt oxide (NMC) chemistry, which packed a lot of power into a tight space. But the cobalt raised red flags due to its associations with unsafe labor practices in the Democratic Republic of the Congo, the world’s largest source for the mineral.

The industry has shifted steadily away from NMC to other chemistries. Lithium iron phosphate (LFP) has proved itself the big winner, overcoming a disadvantage in energy density to emerge as the workhorse for both vehicle and grid batteries. Crucially, this chemistry does not require cobalt or nickel, so demand for those metals has been smaller than experts predicted just a few years ago.

Across all chemistries, manufacturers have improved cell-level energy density by 25 percent since 2015, meaning less mineral content is needed per unit of energy storage.

Finally, recycling — often discussed as a problem yet to be solved for the battery industry — has already made a dent in demand for new mineral extraction. Much work remains to be done; more-efficient techniques would reduce the cost of recycling, making it more competitive with new mining. Still, the report notes that more than half the world’s lithium-ion batteries at the end of life found their way into recycling, per a 2019 study by Argonne National Lab.

If that seems surprising, it’s important to remember that recycling capacity doesn’t need to keep pace with today’s battery demand; rather, it needs to keep up with the population of aging batteries made roughly 10 to 15 years ago, which is considerably smaller. Global recycling investments announced by March of this year significantly outpace the capacity of batteries in need of recycling through 2030, per the RMI report (how many of those facilities actually get built remains to be seen).

All told, RMI calculates that without this chemistry change, density improvement, and recycling buildout, the battery industry would have needed 58 percent more lithium in 2023, 127 percent more nickel, and 138 percent more cobalt. The industry is still consuming a lot of minerals, but far less than it was once on track to require.

“Experts keep underestimating the pace at which the battery sector manages to innovate minerals out of batteries,” the report notes. ​“Outlooks keep correcting battery mineral demand downward, even as battery demand forecasts are corrected upward.”

Next steps: Global battery recycling

If the trends on battery innovation continue and an effective global recycling system emerges, demand for newly mined battery materials could peak in the mid-2030s, per the RMI report.

The ongoing chemistry innovation is well underway. The authors calculated a net learning rate for energy density improvement of 4 percent, based on recent empirical data, meaning that for each doubling of cumulative battery demand, battery cells have historically stored 4 percent more energy for their weight. If that trend continues, the industry should improve battery energy density by another 25 percent or more by 2050.

Chemistry and design improvements can reduce total mining needs, but recycling can take things even further. Battery recycling facilities are up and running around the world, and a cadre of new technologies are under development to improve recovery rates and bring down costs. China has already taken a lead on battery recycling buildout. In the U.S., companies like Ascend Elements and Redwood Materials have invested a few billion dollars in the last few years to build new facilities focused on novel techniques.

For recycling to thrive, it must produce key battery ingredients more profitably than mining. That’s often not the case today, the report notes, in part because markets don’t fully account for the negative social impacts of mining. Recycling makes much more financial sense with ​“the right externality pricing policies.” So would the entire effort to reduce carbon emissions, for that matter.

Some of the battery-recycling startups will surely fail; buzzy contender Li-Cycle has already pumped the brakes on its New York factory buildout as it scrambles to remain solvent. But the battery industry is in the very early stages of its technological growth spurt, so there’s a lot of potential improvements to be made.

Similarly, the global system for collecting and processing used EV batteries has ample room for improvement. EV companies have detailed knowledge of their batteries’ locations and health; it shouldn’t be hard to use that knowledge to direct drivers to a collection point when the battery is on its last legs. EV manufacturers that partner with recyclers can then feed the old battery materials right back into new batteries.

If battery and car manufacturers integrate with recycling operations, the whole system will become more efficient and cost-effective, Walter said. Conversely, a lack of systematic thinking ​“could be a really big bottleneck” to the circular battery future.

Structural impediments to circular battery economy

That’s the hopeful vision: Instead of the clean energy movement ushering in a resource-extraction dystopia, it allows humanity to break away from the harmful, expensive, Sisyphean cycle of mining stuff and burning it year over year.

Here are a few of the biggest threats to this vision coming true.

For one thing, it would require reshaping the business landscape for mining companies. They’re used to spending a lot of money to set up new mines, then making it back by cranking out as much mineral product as they can muster for years to come. The circularity vision depends on companies continuing to invest in new mines up until the moment when recyclers start making new extraction unnecessary, but if demand for mined materials starts to plummet, there’s not much incentive to start a new mine.

Countries could set reserve targets for strategic battery materials, then pay miners to crank out an oversupply of minerals that will sit in stockpiles. That could stabilize mining during the years of transition to the theoretical circular-economy end state. Western nations did something similar in response to the oil shocks of the 1970s, Walter noted, so there’s precedent for this kind of thing in extreme circumstances.

“Minerals store really well — it’s not like electricity,” Walter said. ​“We can try to front-load a lot of mineral extraction.”

A managed battery transition also would have to compete for political buy-in with other national priorities. For instance, the U.S. lately has veered into protectionist tariffs to keep cheap Chinese EVs out and support (more expensive) American-made electric cars. In a circular battery economy, nations would have great reason to import electric cars for the purpose of expanding their domestic supply of battery materials. They could even consider penalties for shipping vehicles out of the country, since that would let battery minerals slip offshore.

Last, consumer and automaker preferences will influence how many minerals the recyclers will have to supply. If automakers push for the biggest, bulkiest EVs, as American companies seem intent on doing these days, they’ll need more materials than they would in a scenario with higher shares of sleek, lighter vehicles.

The EV industry’s approach to minerals will continue to evolve. Any predictions of doom that assume today’s conditions will continue in perpetuity are assuredly wrong. At this point, though, a circular battery economy is by no means guaranteed; if it materializes, it will be through the actions of EV makers, mining companies, and governments hashing it out over the next few decades.