Q1. Could you start by giving us a brief overview of your professional background, particularly focusing on your expertise in the industry?

I am a results-driven techno-commercial leader with over 36 years of experience across diverse manufacturing sectors, including 2W OEMs, Tier 1 automotive suppliers, auto components, and metal packaging. 

My career has been defined by a consistent ability to lead end-to-end operations, drive profitability, and spearhead successful new product development initiatives. I bring deep expertise in plant operations, sourcing and supply chain, production planning, quality management systems (ISO/QS/TS/14000/18000), TPM, TQM, Kaizen, and business process improvement. I take pride in building efficient, quality-driven systems that meet stringent customer requirements while delivering on profit and performance goals.

Throughout my journey, I’ve worked closely with customers to support new business conversions, optimize product costing, and ensure seamless execution of commercial agreements. I’ve led impactful training programs in TPM, 5S, ISO, negotiation, and soft skills to strengthen team capabilities and enhance operational excellence. My hands-on experience in vendor development, cost reduction, inventory management, and strategic sourcing has consistently delivered measurable savings. I’m passionate about aligning my expertise with organizational goals and look forward to exploring how I can contribute meaningfully to your business growth and transformation.

 

Q2. How is the growing importance of critical raw materials like lithium and cobalt shaping the EV manufacturing landscape, and what are the key challenges faced by manufacturers in securing these resources amid current global and Indian supply chain constraints?

Growing Importance of Critical Raw Materials for EV Manufacturing

The electric vehicle (EV) market is experiencing an unprecedented surge in growth, reshaping the automotive industry and driving a relentless demand for key battery materials, most notably lithium and cobalt. In 2024, global EV sales surpassed 17 million units, marking a substantial 25% increase over the previous year. This upward trajectory is to continue, with forecasts suggesting that EVs could represent 40% of all passenger car sales in the United States by 2030 and exceed 50% of global car sales by 2035. This rapid adoption of electric mobility is further underscored by the anticipated exponential growth in battery demand, which is expected to increase four-and-a-half times by 2030 and more than seven times by 2035 based on current policy indications.

Therefore, ensuring a secure and sustainable supply of these raw materials is paramount to the automotive industry's successful transition towards electrification.

Current Global and Indian Scenario of Lithium and Cobalt Supply Chains

The global supply chains for lithium and cobalt have a significant geographical concentration in mining and refining, creating inherent vulnerabilities. Lithium mining is primarily concentrated in Australia, accounting for the largest share (52%), followed by Chile (22%), and significant reserves are also found in Argentina and Bolivia. However, lithium refining into battery-grade materials is heavily dominated by China, which processes a substantial portion of the global supply. This concentration of refining capacity in a single country introduces a potential point of dependency and strategic risk for EV manufacturers worldwide.

Similarly, the global cobalt supply relies heavily on the Democratic Republic of Congo (DRC), which accounts for approximately 60-70% of the world's mined cobalt. Notably, cobalt is often extracted as a by-product of nickel and copper mining in the DRC, meaning its supply is also influenced by the demand and production levels of these other metals. Like lithium, China also plays a dominant role in refining cobalt, processing over half of the global output. This high degree of global supply chain vulnerabilities exposes EV manufacturers to geopolitical risks.

In the Indian context, the current reality is that India remains heavily dependent on international sources. To address this, the Indian government is actively pursuing partnerships and collaborations with mineral-rich countries worldwide to secure a more stable and reliable supply of lithium and cobalt for its expanding EV industry.

Key Challenges Faced by EV Manufacturers in Procuring Lithium and Cobalt

Electric vehicle manufacturers face complex challenges in securing a consistent and cost-effective supply of lithium and cobalt. One of the most significant hurdles is the price volatility inherent in these commodity markets. Lithium prices experienced a dramatic surge between 2021 and 2022 due to rapidly increasing demand outpacing available supply before showing signs of stabilization in 2023. Similarly, cobalt prices have historically been prone to significant fluctuations, often influenced by geopolitical developments, such as the Democratic Republic of Congo's export policies and ethical sourcing concerns.

Furthermore, China's dominant position in the processing and refining lithium and cobalt adds another layer of strategic risk, as any changes in Chinese policy or international relations could have far-reaching consequences for global EV production.

The mining practices and environmental concerns associated with the extraction of lithium and cobalt present another significant challenge. Traditional lithium mining methods can lead to water scarcity, contamination, soil degradation, and biodiversity loss. Cobalt mining is often associated with severe ethical issues, including the use of child labor and unsafe working conditions. Moreover, the energy-intensive nature of both mining and refining processes contributes significantly to the overall carbon footprint, raising concerns about the true environmental benefits of electric vehicles. These ethical and environmental implications attract increasing scrutiny from regulatory bodies and environmentally conscious consumers.

EV manufacturers also face logistical bottlenecks in the supply chain. Disruptions in global shipping and transportation networks can lead to delays in delivering raw materials and components, impacting production schedules and increasing overall costs.

Finally, the increasing demand for lithium and cobalt from other rapidly growing sectors, such as consumer electronics and energy storage solutions, intensifies competition for these limited resources, potentially driving up prices and creating supply constraints.

 

Q3. How are EV manufacturers reducing costs and lead times for battery-grade lithium and cobalt through value engineering and supply chain mitigation strategies?

Value Engineering and Cost Reduction Strategies in the EV Battery Supply Chain

To drive down the overall cost of electric vehicles, manufacturers are actively exploring and implementing various value engineering and cost reduction strategies throughout the battery supply chain. One prominent approach involves the adoption of alternative battery chemistries that reduce the reliance on expensive or ethically problematic materials like cobalt and potentially decrease the amount of lithium required. Lithium Iron Phosphate (LFP) batteries have gained significant popularity due to their lower cost (averaging 32% cheaper than Nickel Manganese Cobalt (NMC) batteries), enhanced safety profile, and longer lifespan, although they typically offer lower energy density. This makes them a particularly attractive option for standard-range electric vehicles. Sodium-ion batteries represent another promising alternative, leveraging sodium's abundance and lower cost compared to lithium while also exhibiting better performance in cold weather conditions. Furthermore, ongoing research and development efforts are focused on creating entirely cobalt-free battery technologies, aiming to address the ethical and cost-related concerns associated with this material.

Another crucial approach involves material recycling within the EV battery supply chain. Manufacturers can recover valuable materials such as lithium, cobalt, and nickel from end-of-life batteries and manufacturing scrap by investing in and scaling up efficient battery recycling processes, reducing their dependence on primary mining and promoting resource efficiency. Effective recycling has the potential to significantly decrease the demand for virgin materials; for instance, it is estimated that recycling could reduce the demand for lithium and nickel by 25% and for cobalt by 40% by the year 2050.

EV manufacturers are also pursuing supply chain diversification strategies to moderate the risks associated with relying on geographically concentrated suppliers. This includes exploring and investing in new mining projects in more politically stable and geographically diverse regions. Furthermore, some automakers are adopting new business models that involve direct investments in mining companies to gain greater control over their supply chain margins and secure more direct access to critical minerals.

By implementing a systematic approach to Value Analysis and Value Engineering (VAVE), manufacturers can meticulously analyze the function and cost of every component and process within the battery supply chain. This can identify and eliminate unnecessary expenses while maintaining or even improving the overall value and performance of their products.
Implementing cost-effective manufacturing processes is also important for reducing the overall cost of EV batteries. This involves adopting advanced manufacturing technologies, increasing automation on production lines, and implementing innovative production techniques to streamline operations and minimize waste.

Finally, the development and deployment of Direct Lithium Extraction (DLE) and other innovative lithium extraction technologies hold the potential to increase the supply of lithium more efficiently from unconventional sources such as lithium-rich brines.

Current Lead Times for Battery-Grade Lithium and Cobalt and Mitigation Strategies

However, specific lead times for battery-grade lithium and cobalt cannot be determined precisely. Since the price peaks experienced in 2022, market conditions for both lithium and cobalt have shown a weakening trend, with the current supply generally exceeding the demand. This state of oversupply suggests that current lead times for these materials are shorter compared to periods of high demand and tight supply. However, it is important to note that the lithium market is projected to stiffen again in 2025; thus, the current period of potentially shorter lead times might be temporary.

EV manufacturers are employing several key strategies to proactively address and potentially reduce lead times for these critical materials. One significant approach is establishing direct sourcing agreements with mining companies and raw material suppliers. By forging these direct relationships, manufacturers aim to secure long-term contracts that provide a more predictable and stable supply of lithium and cobalt. For instance, Tesla has detailed its strategy of sourcing lithium, nickel, and cobalt directly from mines, allowing for greater transparency and control over their supply chain.
Another crucial strategy involves investing in processing facilities. By investing in their own or joint-venture refining and processing plants, EV manufacturers and battery suppliers can reduce their reliance on third-party processors, potentially shortening the supply chain.

Beyond these direct actions, the previously discussed supply chain diversification strategy also plays a vital role in reducing lead times. By sourcing from a wider range of suppliers and regions, manufacturers can decrease their vulnerability to disruptions in any single part of the supply chain, thereby minimizing the risk of extended lead times. Strategic stockpiling of critical materials could also serve as a buffer against unexpected delays in the supply chain, although this strategy carries its financial implications.

 

Q4. How are raw material volatility, battery costs, and supply chain disruptions impacting the financial performance and profitability of major EV manufacturers, and what strategies are they adopting to achieve cost parity with internal combustion engine vehicles?

Financial Performance Analysis of Major EV Automobile Companies 

The high component costs, particularly the battery, which accounts for over 30% of the total vehicle cost, are a primary factor contributing to the lack of profitability for many EV manufacturers. The significant fluctuations in raw material prices directly impact these production costs and can erode profit margins. Moreover, supply chain disruptions, ranging from semiconductor shortages to raw material scarcity, have caused production delays and increased operational expenses for EV companies. Reducing production costs to be comparable with internal combustion engine vehicles remains a significant hurdle for the EV industry. Some manufacturers, like Tesla, have benefited from focusing on higher-end models and achieving greater profit margins per vehicle sold. Overall, the financial performance of EV companies is heavily influenced by raw material costs, supply chain resilience, and the ability to achieve economies of scale in a competitive global market.

Q5. What is the future outlook for the EV critical component supply chain, and how will rising demand, recycling, new battery chemistries, and second-life applications shape the availability and cost of materials like lithium and cobalt by 2035?

Future Outlook for the EV Critical Component Supply Chain Looking ahead, the supply chain for critical EV components, particularly lithium and cobalt, is poised for significant transformation over the next decade. In the next 5 years (by 2030), the demand for both lithium and cobalt is projected to experience a continued surge, primarily driven by the sustained growth in electric vehicle adoption and the increasing deployment of battery storage solutions for renewable energy. The balance between lithium supply and demand remains a subject of debate, with some reports forecasting potential deficits while others suggest that planned mining projects could adequately meet or even exceed the growing demand.

Recycling initiatives are anticipated to gain momentum and contribute a more substantial share of the overall supply of critical materials. With technological advancements and stabilizing critical mineral prices, this trend is expected to lead to a continued decline in battery pack prices, making electric vehicles more cost competitive. Looking further into the future, over the next 10 years (by 2035), the electric vehicle market is expected to mature significantly, with projections indicating that EV sales could surpass 50% of all new car sales worldwide. This widespread adoption will fuel an even more substantial increase in battery demand. By this time, recycling is anticipated to play a pivotal role in the supply chain, potentially meeting a considerable portion of the demand for lithium, nickel, and cobalt. New battery chemistries, such as solid-state batteries, promise higher energy density and improved safety, impacting the demand for specific raw materials. Additionally, the second-life market for EV batteries is expected to experience substantial growth, creating opportunities for repurposing these batteries for stationary storage and other applications.

Q6. How are current and future trends in raw material costs—particularly lithium, cobalt, and nickel—shaping the economics of EV manufacturing, and what role will battery chemistry, recycling, and innovation play in driving cost reductions?

Raw Material Costs in EV Manufacturing: Present and Future Trends

Currently, raw materials, including lithium, cobalt, and nickel, constitute a significant portion of the overall cost of producing an electric vehicle battery, ranging from approximately 30% to 60%. The contribution of cobalt can vary considerably depending on the specific battery chemistry employed, with NMC (Lithium Nickel Manganese Cobalt Oxide) batteries typically having a higher cobalt content and thus a greater cost associated with this compared to cobalt-free options like LFP (Lithium Iron Phosphate). Overall, the battery pack can represent a substantial 30-50% of the cost of manufacturing an electric vehicle. Average raw material costs per electric vehicle have fluctuated significantly in recent years, almost 140% increase since early 2020. Looking at future trends, raw material prices are expected to remain volatile in the short term. However, Goldman Sachs Research suggests a significant decrease in battery prices (around 40%) by 2025 - 26, with a substantial portion of this reduction attributed to falling prices of key raw materials such as lithium, nickel, and cobalt. Over the longer term, the cost of raw materials for EV batteries will be controlled by many factors, including the fundamental availability of these resources, the pace of technological innovation in battery chemistries and extraction methods, the increasing contribution of recycled materials to the supply chain, and the demand from other industrial sectors. Furthermore, continuous improvements in battery manufacturing processes are anticipated to reduce overall battery production costs.

 

Q7. How are global and national government policies—such as incentives, sourcing regulations, and recycling mandates—shaping the development of a resilient and sustainable EV battery supply chain?

Government Policies and Support Mechanisms for EV Battery Supply Chain 

Governments across the globe are increasingly recognizing the strategic importance of establishing robust and sustainable supply chains for electric vehicle batteries and are implementing a range of policies and support mechanisms to achieve this goal. The United States offers substantial incentives to boost domestic battery manufacturing, processing critical minerals, and sourcing these materials from within the US or its free trade partners. The European Union has also taken decisive steps, including the sustainability, performance, and safety of batteries throughout their entire lifecycle, stringent requirements for ethical sourcing of raw materials, and ambitious targets for material recovery through recycling. In India, the government has been actively promoting the adoption and manufacturing of electric vehicles through various policy initiatives. To specifically boost domestic manufacturing of advanced battery technologies, the Indian government launched the PLI (Production Linked Incentive) Scheme for Advanced Chemistry Cell (ACC) Battery Storage. Furthermore, the Indian government is also taking steps to reduce the cost burden on manufacturers by exempting import duties on certain critical minerals essential for battery production, including lithium, cobalt, and nickel. Additionally, introducing Battery Waste Management Rules in 2022 underscores the government's commitment to fostering a circular economy for EV batteries by promoting their reuse and recycling.