Experts: Kate Whitefoot (CMU) and Elsa Olivetti (MIT)
Vehicle electrification is currently driving the largest transformation of the automotive industry in over 100 years, which will affect every piece of the value chain across the U.S. (NAS 2021). Current EV battery chemistries require lithium—which has seen large price increases due to the combination of increases in demand, global conflict, and large lead-time required to open new mines. Further, the battery chemistry most commonly used in EVs today also requires cobalt, nickel, and graphite. Global production of these inputs is concentrated in a small set of countries and is expected to face future supply chain risks (Olivetti et al., 2017; Hund et al., 2020).
Without investments to improve the resiliency of domestic automobile manufacturing to shocks of critical materials for EV batteries, the U.S. risks future disruptions that could significantly affect U.S. households, jobs, and manufacturer competitiveness. This deep-dive analysis will assess the value of investment in technological capabilities that increase battery supply-chain resiliency.
This assessment requires three steps:
- quantifying effects of global material disruption scenarios on consumer costs, U.S. automotive company competitiveness, and manufacturing jobs
- capturing the cause-and-effect mechanisms in materials production and resource depletion affecting global material supply and prices
- identifying the potential for investment in innovation in alternative resource extraction, alternative battery chemistries, and other manufacturing site investments to alleviate (1) and (2).
The assessment builds on the team’s prior work in vehicle demand estimation, modeling competition among automakers, estimating conventional and alternative-chemistry battery costs and performance, and estimating labor hours in electric vehicle manufacturing operations (Sripad and Viswanathan, 2017; Whitefoot et al., 2017; Cotterman et al., 2022). Key outputs will be:
- an actionable set of metrics to comprehensively estimate long-term economic risks in the materials supply chain
- automotive market simulations that quantify the value of investments in innovation and manufacturing sites to avoid supply-chain disruptions and estimate of the impacts of these choices on U.S. manufacturing labor demand