Modeling the Supply Chain of Critical Materials Used in Li-ion Battery Using the System Dynamics Approach

Abstract

Lithium-ion batteries (LIB) are continually growing with the demand growth of electric vehicles (EVs), energy storage systems (ESS), and consumer electronics. This demand growth created problems in the supply chain of some critical materials of LIB; mainly cobalt, and lithium. These materials have either limited supplies due to several reasons such that they are not yet mined in substantial amounts or are mined in only a few countries with trade policies that may limit their availability.

To ensure the expansion of the new energy vehicle industry and the availability of its raw material, it is essential to accurately assess the supply-demand dynamics and origins of lithium and cobalt resources. This research investigates the flow of these crucial materials in the Lithium-Ion Battery (LIB) supply chain by developing a framework for the energy vehicle industry's material flow analysis, with a simple flow of energy storage systems, and consumer electronics. In addition, resource flow tables for lithium and cobalt are compiled for the LIB industry. Inadequate domestic supply of lithium and cobalt ore, fluctuations in inventories, and variations in import and export activities appear to be the primary contributors to the supply-demand strain in the new energy vehicle sector. The paper examines the current situation of the LIB manufacturing supply chain, and supply chain analysis of cobalt and lithium to identify potential bottlenecks in the supply chain, and asses potential risks and uncertainties to mitigate potential disruptions as supply shortages. This paper then explores different scenarios and projections to measure their impact on the supply and demand of cobalt and lithium.

Date of Award	17 Nov 2023
Original language	American English
Supervisor	Ahmad Mayyas (Supervisor)