Future of Global Electric Vehicle Supply Chain: Exploring the Impact of Global Trade on Electric Vehicle Production and Battery Requirements

Electric vehicle (EV) adoption is a key action toward reducing global greenhouse gas emissions from the transport sector, enabling a shift from a fossil fuel intensive on-road sector to a material intensive one, especially for critical minerals used in lithium-ion batteries: lithium, cobalt, and nickel. Recent literature has manly focused on forecasting future EV demand and subsequent global battery and critical mineral requirements without modeling which countries will produce the EVs. The Model for International Electric Vehicle Trade (MONET) is a policy-scenario model that combines up-to-date EV demand forecasts, light-duty vehicle global trade flows under different scenarios, and battery characterization to estimate future EV production and battery requirements per country. Results indicate that future EV global trade will be characterized by trade within regional blocks, with contrasting results: North America will be a big producer that will still require imports to meet their demand, Europe will be a big trade region within itself, Japan and South Korea will be big exporters of EVs, and China’s production could go almost entirely to satisfy their domestic supply. Different scenarios show variability according to changes in global trade flows, which are affected by economic and geopolitical events. A major insight reflected in MONET is that an increase in demand for EVs in one country does not translate to a proportional increase in production in the same country. MONET helps to inform which countries will be major producers of EVs by vehicle size, and the amount of battery capacity they will need to secure. Future expansion of MONET includes critical materials estimations based on future battery chemistry development.