The unprecedented expansion of the lithium-ion battery market over the past 10 years caused a significant increase in demand for core materials used for battery production. The higher the demand, the higher the pressure to increase prices or search for alternatives.
The Department of Energy’s (DOE) Vehicle Technologies Office recently highlighted the price evolution of the elements used in lithium-ion battery cathodes between 2010 and 2021.
As we can see on the graph, the costs of some of the materials fluctuated a lot in recent years. Specifically, cobalt's price notes high volatility.
This is why a few years ago many battery manufacturers rushed to switch from high-cobalt to high-nickel battery cathodes (they were in the majority in 2021). In the case of many new high-energy dense chemistries, the cobalt content has been lowered to less than 10% or even closer to 5% of the cathode.
The other way was to switch to less energy-dense battery chemistries (mostly LFP), which do not contain cobalt at all.
While cobalt remains the most expensive (per weight unit), the next one in line is nickel. Only time will tell whether it will remain relatively stable (Reuters reports some huge surges this month, partially related to the market uncertainty).
Source: Nitin Muralidharan, Ethan C. Self, Marm Dixit, Zhijia Du, Rachid Essehli, Ruhul Amin, Jagjit Nanda, Ilias Belharouak, Advanced Energy Materials, Next-Generation Cobalt-Free Cathodes – A Prospective Solution to the Battery Industry's Cobalt Problem, January 2022.
The third most expensive cathode material in lithium-ion batteries is copper, but its share in the battery is relatively low.
An interesting thing is how stable iron is in this background, which should help to further popularize the Lithium Iron Phosphate (LFP) chemistry. Tesla already switched the entry-level version of its cars to LFP globally and hints at the same with energy storage systems.
Because of how big the share of the battery is out of the overall cost of an electric vehicle, and that the cathode is a key part of the battery cost, the prices of particular elements on the global market will play a very important role.