The world’s transition from fossil fuels into renewable energy has fuelled the expansion of the electric vehicles market. In 2021 alone, a total of 6.6 million EV cars were sold worldwide. This is more than double the number of sales from the previous year.
There is now an estimated 16
million EVs on the road, 9% of the total market share of personal vehicles.
Nickel, being a vital component of EV batteries, will become increasingly
driven by this market.
The soaring EVs adoption rate
is expected to be further boosted by tightening government emission policies.
The world’s target of limiting global warming to within 1.5 degrees Celsius has
induced renewed focus onto the energy transition process. The transportation
sector is responsible for emitting up to 25% of current global carbon
emissions.
Li-ion King
Nickel has long been used as
a component of commercial batteries. The first most common compositions were
nickel cadmium (NiCd) and nickel metal hydride (NiMH) rechargeable batteries.
They were initially used in portable devices. Eventually when their energy
density was improved enough, the NiMH battery was used in a Toyota Prius in the
1990s.
Today, most batteries use
some variation of lithium ion mix due to their significantly higher energy
densities and chemical stability. The most commonly used nickel containing
batteries in EVs and renewable energy storage are lithium manganese cobalt
(NMC) and lithium nickel cobalt aluminium (NCA), which contain 33% and 80%
nickel, respectively.
A third battery that has been
gaining market recognition in recent years is the lithium iron phosphate (LFP)
battery. This is because the chemicals used for its manufacturing are in higher
abundance, while the metals needed for nickel batteries have been experiencing
rising prices recently due to supply chain concerns. This makes LFP production
cheaper in comparison.
NMC/NCA have higher energy
densities, so they are more suitable for vehicles of higher speeds and longer range.
They can also be manufactured to smaller sizes without compromising performance,
making them ideal for companies like Tesla where cars are designed to be sleek
and aerodynamic. Nickel containing batteries also have a better performance at
lower temperatures—even at -20°C the battery can still perform at 70% capacity.
They also charge faster.
On the other hand, LFPs have
a higher temperature resistance, so they are less likely to overheat and catch
on fire, making it a safer option. However, at cold temperatures they can only
perform at 55% capacity. Their lower ranges make them ideal for public
transport such as intracity buses.

The type of battery chosen by
the manufacturer will depend largely on the market. The country with the
biggest EVs market is China, and in 2021 its best-selling model, the Wuling
Hongguang Mini EV, used LFP in its battery.
This is part of a proliferating trend
in which the energy density of the vehicle has been exchanged for lower
manufacturing costs. This type of battery works for the Chinese market
because consumers in the major cities will always be in relative proximity to
charging stations, so that range and speed limitations do not overly affect
performance.
However, for other markets
like the US, nickel containing batteries are still preferred as consumers still
consider mileage an important factor. In Europe the NMC/NCA’s ability to
maintain performance despite lower temperatures would make them more suitable
for sub-zero winters.

All Aboard the Supply Train
Only class 1 nickel can be
used in battery manufacturing, meaning that the finished nickel product needs
to have a grading of over 99.8%. Traditionally, sulphide ores have been used to
produce class 1 nickel due to their higher grades, but as accessible sulphide
deposits deplete globally, production has turned towards using laterite ores
instead.
Yet this method requires the production of HPAL intermediates and
nickel matte, and the more complex refining process involved means higher
carbon emissions. Class 1 nickel produced from sulphides emits 18t of CO2
equivalent for every tonne of nickel produced, while laterite class 1 nickel
emits up to 70t of CO2 equivalent. This means that relying on laterites for
battery grade nickel will triple the carbon footprint of the production
process.
Elon Musk’s call for nickel
to be mined and produced “efficiently and in an environmentally sensitive way”
back in 2020 was a direct response to this. It signified a new era of EV
batteries manufacturing in which “green” nickel will play a vital role.
Since then, there have been a
growing number of projects and joint ventures proposed for the construction of
new nickel sulphate and precursor materials plants. Britishvolt has entered into
a partnership with Indonesia’s VKTR for the development of low carbon nickel
sulphate production that will supply Britishvolt’s battery gigafactory in the
UK. The companies aim to reduce the carbon content of battery production from
93kg/kWh to 25kg/kWh.
Chinese waste treatment
company Zhejiang Weiming has also teamed up with Chengtun Mining and Tsingshan
to construct a battery materials plant. The facilities will have a nickel matte
refinery and production lines for nickel ternary precursor materials. A
production capacity of 200ktpa is proposed. This is Weiming’s second battery
project following its partnership with Merit International to construct a
40ktpa nickel smelter in Indonesia.
An Acquired Waste
As lithium-ion batteries
reach their expected lifespan, battery materials recycling will become
increasingly important. A typical car battery has a warranty of around five to
eight years. After that, the metals used in the battery can be recovered to
propel a circular economy.
Volatility in nickel ore supply due to recent price
swings and the Russia-Ukraine conflict has caused increased research and
funding to focus on recycling. As of now, the most common method of recycling is
smelting, and the resultant products still require several stages of treatment
before high purity nickel can be produced.
Aqua Metals, a batteries
recycler, has managed to extract nickel metal using electroplating from black
mass, the residual form of spent batteries after it has been processed for
recycling. The company believes that this refining method will have a much
lower carbon footprint as it does not require high temperatures or pressures.
Additionally, the plated nickel can directly be fed into a refinery to produce
nickel sulphate, a cathode precursor material. This integrates the entire
recycling and production process and reduces the total environmental cost.
Future Size Me
Tesla revealed that nearly
half of their vehicles produced in the March Quarter of 2022 used the LFP
battery, even though nickel batteries have always been favoured in the past. The
company’s latest Tesla Model 3 is also equipped with the LFP battery,
demonstrating an increased preference for nickel-less batteries due to
uncertainties in the metal’s supply chain and prices.
In the long-term, nickel will
still be an integral component of batteries, and this will continue to
influence the metal’s market. Finished nickel demand will not balloon as
drastically as EV demand, as there are emerging alternative battery chemical
compositions which are suited for different markets depending on consumer
preferences and behaviours. Demand growth from EV batteries will slow because
of this.