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Diffusion of battery electric vehicles (BEVs) in four-wheeled light-duty vehicles (LDVs) can substantially increase the demand for critical minerals used in lithium-ion batteries (LIBs), such as lithium, nickel, and cobalt. This rising demand potentially increases mineral prices and hinders further penetration. We assess how critical minerals affect BEV diffusion using a vehicle-choice model for LDVs that endogenizes price–demand feedbacks, capturing equilibrium price responses to technology-induced demand shocks. We evaluate outcomes under a mitigation scenario generated by the Global Change Analysis Model, consistent with the SSP2–RCP2.6 pathway. The results show that incorporating mineral price–demand feedback could raise mineral prices and reduce the global BEV sales share from 32% to 18% by 2050 under our modeling assumptions. Mineral recycling alleviates mineral demand and raises the BEV sales share by three percentage points. Shifting to lithium iron phosphate cathodes yields the largest benefit, increasing BEV sales share by seven percentage points. In contrast, LIB replacement, stationary battery energy storage systems, and second-life use negatively impact BEV diffusion, whereas the shift to high-nickel cathodes has a positive impact. Unlike BEVs, the sales share of plug-in hybrid vehicles, which require smaller LIB capacities, remains stable despite changes in mineral prices and LIB costs. These findings highlight the importance of mineral price–demand dynamics and strategies to reduce net mineral demand in enabling BEV diffusion. Our proposed model offers a framework for exploring decarbonization pathways under critical mineral constraints, supporting policymakers and industry in designing feasible and sustainable electrification strategies. • Vehicle-choice model endogenizes price–demand feedbacks of critical minerals. • Rising mineral demand raises prices and hinders battery electric vehicle adoption. • Recycling and lithium iron phosphate reduce mineral use and support electrification. • Plug-in-hybrid market share remains stable amid mineral price volatility. • Our findings suggest the importance of resource-efficient electrification pathways.
Published in: Journal of Cleaner Production
Volume 554, pp. 148145-148145