Carbon-Optimal Allocation of Lithium-Ion Batteries in Transportation Applications

This analysis seeks to understand, in a world with limited political and monetary capital available for investing in climate initiatives and constrained battery raw material mining, processing, and production resources, which applications of those batteries will be most impactful in reducing greenhouse gas emissions. It pulls data from a wide range of sources and create a simple yet effective model for comparing the carbon-reduction merit of electrifying different vehicle segments, from electric micromobility to light-duty passenger vehicles to heavy-duty commercial vehicles, and the quantity of batteries required of each application to achieve those reductions. The result is a valuable synthesis of a disparate set of inputs that highlights the carbon reduction potential and cost, in battery capacity and dollars, of replacing conventional vehicles of each segment with battery electric vehicles (BEVs). It is clearly demonstrates that micromobility, or electric bicycles and electric standing scooters, offer the most GHG abatement potential per kWh of battery capacity; that light-duty BEVs are penalized by the perceived driving range requirements of consumers that necessitate oversized battery packs relative to typical duty cycle, but due to the sheer volume of those segments will be vital to achieving decarbonization goals; that commercial BEVs represent enormous GHG mitigation potential per vehicle and, despite large batteries, have considerably lower abatement cost in kWh than passenger cars; and that monetary marginal abatement cost after accounting for fuel cost savings is compelling for all BEVs, particularly for heavy-duty commercial vehicles. Policymakers should view this study as a guide to crafting policy for a battery-constrained world that requires a massive expansion of investment in vehicle electrification to meet carbon reduction goals. The results of this analysis encourage policies to incentivize displacing car trips with micromobility, incentivize efficiency across all vehicle segments, expand investment in light-duty BEV purchase incentives, and dramatically increase investment in heavy-duty commercial BEVs. Rather than choose winners and losers in electrification, this study seeks to contextualize the value of electrifying each type of on-highway vehicle. Of course, policymakers should seek to alleviate battery supply chain constraints by investing in domestic raw material extraction and processing, cell and pack production capacity, and end-of-life battery recycling and raw material recovery. The National Blueprint for Lithium-Ion Batteries released by the Federal Consortium for Advanced Batteries in 2021 [1] as well as the Biden Administration’s supply chain review report [2] provide a robust examination of the need for such policies as well as many actionable policy recommendations. But if battery production in the future becomes the limiting factor in transportation decarbonization that many industry experts fear it will be, the ability to determine the most carbon-optimal allocation of battery production and prioritize investment accordingly will be highly valuable to policymakers seeking to draw down GHG emissions as quickly as possible