Cheaper nickel means nickel electric batteries are here for the long-term
The global nickel market is undergoing a profound transformation that means nickel's role in the future chemistry of electric batteries is here to stay for the long-term.
The share in lithium-ion nickel manganese cobalt oxide (NMC) battery chemistry in the global market fell from nearly 90% in 2019 to 60% in 2022. However, it would be a misconception that this means a fall in the total demand of nickel.
Improvements in other battery chemistries and the high cost of nickel in recent years meant automakers in China (and the West) shifted towards alternative chemistries.
However, a decrease in electric battery market share does not necessarily translate into lower demand for nickel because the rising numbers of electric vehicles continue to — and are forecast to — rise exponentially.
BloombergNEF forecasts the cumulative value of all forms of EV sales will hit $8.8 trillion by 2030 and $57 trillion by 2050 in its base case scenario. That jumps to over $88 trillion by the middle of the century if the world ditches its gas-guzzling vehicles even more quickly.
Maintaining a significant share of this market would represent a substantial portion of the multi-billion dollar industry and be a major player as a critical mineral.
The advantages of nickel batteries:
- High Energy Density: Nickel batteries have nearly twice the energy density of other materials, translating into extended driving range for EVs
- Lightweight and Compact: Nickel is lighter and takes up less space, allowing for smaller battery packs and more cargo/passenger space in EVs
- Fast Charging in Cold Environments: Some nickel-based chemistries, like NMC, offer faster charging capabilities, especially in cold temperatures than many other chemistries
And, this year, there's a new advantage: price.
The precipitous drop in nickel prices, approximately 50% since its recent peak, can be attributed to a glut in the market, particularly driven by oversupply from Indonesia. Although challenging for many miners outside of Indonesia, this strategic shift means automakers have less incentive to find alternative chemistries.
Recognizing the benefits of nickel batteries, Western automakers are already making deals with nickel suppliers, primarily in Indonesia. For example, the Ford F-150 Lightning (Ford's bet-selling pickup truck) and the Hyundai Ioniq 5 SUV (World Car of the Year in 2022) use nickel-based batteries.
Nickel isn't disappearing, it's adapting. Lower prices coupled with its performance advantages position it for a strong future in the electric vehicle battery market.
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