Factors affecting the market dynamics of lithium-ion battery for electric mobility: a system dynamics perspective

Abstract

As an electrical vehicle (EV) power source, a lithium-ion battery (LIB) is essential in enabling electric mobility growth. However, the high LIB cost, evolving LIB electrode chemistry, and EV range anxiety limit LIBs' market growth. In this paper, we present a system dynamics model to analyse the interrelationship between battery capacity (Battery OEMs), battery electrode composition, range anxiety (EV owners), subsidy (Government), and their effect on LIB cost (per kWh) and market demand. Our study shows that range anxiety's impact on EV sales diminishes with average battery capacity increment. Higher LIB subsidy and low raw materials costs (based on battery capacity and LIB electrode composition) will result in higher LIB demand. We observe that LIB demand increases even when no subsidy exists. Our study will help the government and the industry to contextualise the subsidy policy and marketing strategies for LIBs for different consumer segments.