EV value chain

27 April 2023

The transition to electric vehicles (EV) presents many opportunities across the whole EV value chain, from the extraction and processing of raw materials to the re-purposing and recycling of EV batteries. Australia has some of the largest deposits of raw materials in the world that are used in EV battery production, including lithium, nickel, cobalt, graphite, and manganese.

Interesting.

Lithium is the most important element right now in EV battery production, but it also has the most work to do in terms of expanding supply to achieve net-zero ambitions.
 
From an upstream perspective, the battery supply chain is diversified (with Australia possessing some advantage) but as we move down the supply chain into the refining of battery metals, battery cell manufacturing and EV manufacturing, China takes the cake. 

There is a trend towards increased downstream investment in Europe and North America, but it’ll be difficult to displace China’s dominance. However, there is a major revolution occurring in Australia: a move towards refining. In Kwinana, south of Perth, a new lithium hydroxide plant has been built with two more plants under construction. The performance of these plants over time will provide insight as to whether it makes economic sense to build these out even further.

The question is, how far down the supply chain beyond lithium chemicals can Australia go while remaining profitable?

Historically, this has been very challenging, and the risk is that other parts of the supply chain will be built where energy prices and wage costs are lower. Without considerable policy support and subsidies, further downstream investment is unlikely. In fact, even with this support, whether such operations are sustainable on their own in a decade’s time remains a tricky proposition…

Words: VACC CEO Geoff Gwilym. As featured in the Herald Sun on 28 April 2023.