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Stockpiling or Recycling? Country-Specific Strategies for EV Battery Mineral Security

Author

Listed:
  • Wang, Yitian
  • Vespignani, Joaquin
  • Smyth, Russell

Abstract

Accelerating transport electrification is vital for net-zero goals, yet remains hindered by slow, uncertain development of battery minerals. We show how non-technical risk, such as policy, regulatory, social, and geopolitical risk, inflate capital costs, delay greenfield supply, and heighten price volatility for lithium, cobalt, nickel, manganese, graphite, and copper. Combining Fraser Institute investment scores with reserve shares of these critical minerals, we construct dynamic, mineral-specific risk premiums, derive an optimal stockpiling rule balancing risk and storage costs and introduce a distance-to-iso-cost map comparing recycling and stockpiling strategies. Our framework suggests that in 2040 recycling-led stabilization will be the optimal strategy for mitigating non-technical risk for Japan and Korea, strategic stockpiling will be the optimal strategy for China and the United States, and mixed outcomes for Europe. The method that we propose provides a tractable and updateable toolkit for deciding optimal stockpiles and prioritising recycling where it is most cost-effective.

Suggested Citation

  • Wang, Yitian & Vespignani, Joaquin & Smyth, Russell, 2025. "Stockpiling or Recycling? Country-Specific Strategies for EV Battery Mineral Security," MPRA Paper 127186, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:127186
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    References listed on IDEAS

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    1. Benjamin Jones & Viet Nguyen‐Tien & Robert J. R. Elliott, 2023. "The electric vehicle revolution: Critical material supply chains, trade and development," The World Economy, Wiley Blackwell, vol. 46(1), pages 2-26, January.
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    Keywords

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    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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