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.