Continuous effort to limit the global average temperature increase to 1.5°C above pre-industrial level brings a burgeoning transformation in the mobility sector, dominated by internal combustion engine (ICE) vehicles. Vehicular emissions, a major drawback of ICE vehicles, are being resolved by the rapid adoption of electric vehicles (EVs). The heart of the EV is the energy storage system. Due to high gravimetric energy density, volumetric energy density, power density, good cyclability, high operating voltage, and low self-discharging compared to other rechargeable systems, lithium-ion battery (LIB) emerges as a popular choice for EVs. McKinsey reported that future demand for LIBs will reach 1700 Gigawatt hours (GWh) in 2025 and 4700 GWh in 2030 due to the high usage of LIBs for mobility and energy storage.


EVs use different LIB variants based on LIB capacity, electrode and electrolyte raw material compositions, architecture, and form factors. Raw materials demand is impacted by the consumer preference for EVs having different LIB variants. Government policy support (subsidies) for EV adoption also affects the LIB demand. However, gradual subsidy withdrawal and increasing pressure on geographical constraints of the raw material supply chain due to increasing LIB demand inhibit LIB adoption by increasing the LIB price. Additionally, geopolitical constraints, manufacturing infrastructure, and raw material price fluctuations impact the LIB demand. Supply pressure on raw material and LIB can be alleviated by properly handling end-of-life (EOL) LIB that allows the recovery of raw material and the supply of repurposed LIB.

The above discussion points out that an in-depth understanding of the LIB demand complexity is imperative to accelerate the transition to electric mobility. Analyzing the LIB demand variability and impact of EOL LIB handling requires a system-wide analysis rather than inspecting the individual components. The objective of this research is to develop a system dynamics model to understand the dynamics of LIB demand. The system dynamics model captures the multiple feedbacks active in this LIB ecosystem that consists of raw material supply, manufacturing infrastructure, and EOL LIB management and can predict the dominant system behavior. The results highlight the trade-offs between the LIB cost and the LIB capacity while addressing the issue of range anxiety. The results explain that the strategic selection of LIB electrode chemical composition for EV widely impacts the LIB demand and raw material cost. The model results highlight an exciting result that LIB demand also increases in the non-subsidy scenarios. Along with this, the model results show that battery mix (LIB variants composition in total LIB demand), EOL LIB collection rate, recycling, and repurposing capacity, and recycling efficiency impact the quantity of recovered raw material. Recycling material reduces the demand for virgin raw materials by 2-17%.