The automotive industry is currently under regulatory pressure to reduce CO2 emissions per mile, sparking a massive manufacturing transition to electric vehicles. However, just as supply chains are morphing to accommodate this transition, a potential shortage of minerals used in EV batteries is also appearing on the horizon, according to software as a service (SaaS) provider Vertaeon.
To help confront this sourcing challenge, Vertaeon is offering cloud-based analytics tools to enable the supply chain to develop risk assessments and mitigation processes.
From a raw-material perspective, challenges include availability, cost, location concentration and profitability. Some of the key raw material issues include lithium, nickel and cobalt.
Concentrations of key minerals for battery elements in China, South Korea and Japan can be risk drivers in terms of geopolitical tensions, natural disasters and higher shipping costs. The already identified upstream negative environmental impact of mineral mining can also create future challenges, for example exacerbating the drain on the water supply in South America. Vertaeon says such risk factors combined with the shift toward the next generation in battery technology (potentially overtaking the rare mineral) could trigger a rapid change in the regulation—and ultimately in the production of EVs, favoring hydrogen vehicles instead, for instance.
