No. Metals are not a large portion of battery cost, and so batteries aren’t that sensitive to metal prices.

According to some analyses, a 50% increase in lithium prices would only increase the total cost of a nickel manganese cobalt battery pack by 4%, while a doubling of the price of cobalt would only raise the total cost of a nickel manganese cobalt battery pack by 3%. Like many industrial products, the bulk of the cost is in the manufacturing and distribution of the final product and not in the raw materials themselves.

Some other important points to note are:

• Supply can expand hugely based on known reserves.

• Lithium iron phosphate batteries and non-lithium batteries (sodium, iron, etc.) do not use rare materials.

• History does not support the argument that supply constraints permanently derail disruption, but instead supply always expands to meet demand unless the material is fundamentally scarce (e.g. gold, platinum, etc.).

• Costs of batteries and most other products will decline dramatically as the disruption of energy (by solar, wind and battery power), transportation (by electric vehicles and autonomous electric vehicles), and labor (by artificial intelligence, automation and robotics) reduces the manufacturing and distribution costs.

Explore the evidence...

• Cost curves are like gravity. When an emerging technology, like lithium-ion batteries, becomes cheaper and more efficient to produce, its cost will go down, as can be seen in the graph below. Watch RethinkX Director of Research Adam Dorr explain this phenomenon in more detail.
• The cost improvements in solar photovoltaics, onshore wind power and lithium-ion battery technologies have been predictable and consistent for over two decades. The combination of incremental improvements in the underlying technology, together with scaling of manufacturing creates a strong correlation between unit cost and production volume, as is common across technologies of many kinds. This is illustrated by the graph below. 
  
  
• Moreover, for solar photovoltaics and lithium-ion batteries these improvements have been nothing short of spectacular. The combination of incremental improvements in the underlying technology together with scaling of manufacturing creates a strong correlation between unit cost and production volume, as is common across technologies of many kinds. While history has shown supply can expand hugely based on known reserves, the cost of emerging technologies will always go down as they outcompete and outperform old, existing technologies. Find out more on p15 of our Rethinking Energy report.
• Solar and wind are already the cheapest new generation options and cost less than existing coal, gas and nuclear power plants in many areas. The cost of SWB systems will fall another 70% between 2020-2030, making disruption inevitable (see graph below). Read more about this on p8 of our Rethinking Energy report.
• Our analysis conservatively assumes that battery energy storage capacity costs will continue to decline over the course of the 2020s at an average annual rate of 15%. Find out more on p15-16 of our Energy report.
  
  

Witness the transformation

Solar photovoltaics, onshore wind power and lithium-ion batteries do not operate by the traditional rules of extractive and polluting resources that have governed humanity’s relationship with energy for over a century.

Adoption of solar, wind and battery power is growing exponentially worldwide and disruption is now inevitable as between 2020-2030 they will offer the cheapest electricity option for most regions. Supply will naturally meet demand.