Material Insights · Understanding the Material World

Electric and hybrid vehicles and Nickel-rich lithium-ion batteries

Nickel-rich NMC cells store more energy per kilogram, so they remain the choice for long-range and premium EVs, especially outside China. They cost more per kWh than LFP, and their global share is shrinking as cheaper models switch chemistry.

Electric and hybrid vehicles (energy) and Nickel-rich lithium-ion batteries (energy): 4 relationships.

How they are linked

1. NMC packs for range

Physical flow · Strong · NMC batteries to long-range EVs

Nickel-rich cathodes hold more energy per kilogram, so carmakers that need long range, fast charging or light packs use NMC cells.

  • 265 Wh/kg NMC cell energy density, against up to 205 for the latest LFP
  • almost 80% share of EV batteries outside China using nickel chemistries, 2025

The energy advantage matters most in premium and larger vehicles, and in Europe and the United States, where LFP held only a small share in 2025 (just over 10% in the EU). In the US the LFP share almost halved in 2025, so nickel chemistries gained ground there.

Sources: IEA

2. Cost premium

Cost and price · Medium · NMC packs cost more per kWh

NMC cathodes use nickel, cobalt and manganese, which cost more than the iron and phosphate in LFP, so NMC packs carry a price premium that buyers pay for range.

  • USD 128 per kWh average NMC pack price, 2025
  • USD 81 per kWh average LFP pack price across all segments, 2025

On these averages the gap was about USD 47 per kWh, roughly USD 3,500 on a 75 kWh pack, but the LFP average includes cheap stationary storage packs, so the gap within cars is smaller. When nickel and cobalt prices rise the premium widens and pushes more models towards LFP.

Sources: BloombergNEF

3. Share moving to LFP

Transition · Rising · EV demand shifting from NMC to LFP

As LFP energy density improves, more EV segments can accept it, so NMC's share of EV batteries falls even while total EV battery use grows.

  • over 55% LFP share of EV batteries worldwide, 2025, up from nearly 50% in 2024
  • about 1.2 TWh EV battery deployment, 2025

NMC volumes can still grow because EV battery deployment is expected to reach almost 3 TWh by 2030 in IEA scenarios. Its share now depends on whether LFP keeps improving and on regional rules that favour non-Chinese supply chains, where NMC is more established.

Sources: IEA

4. Price link: main customer

Cost and price · Weak · Both ways

Long-range cars are the main buyers of nickel-rich cells, but the site's car price proxy covers the whole US vehicle market, so it shows almost no link to the battery proxy.

  • 0.06 monthly change correlation
  • 0.04 12-month change correlation
  • 1.95 fitted elasticity

Vehicle prices are set by model mix, financing and competition, so battery cost changes are diluted. The weak result reflects the proxy rather than the real cost pass-through within EV models.

Sources: Material Insights (World Bank, FRED, IMF data)

For investors

Key learnings

  1. NMC keeps the range advantage, 265 Wh/kg against up to 205 for LFP, so it holds premium and long-range segments.
  2. Average pack prices of about USD 128 per kWh for NMC against USD 81 for LFP in 2025 leave NMC exposed wherever LFP is good enough for a segment.
  3. Almost 80% of EV batteries outside China still used nickel chemistries in 2025, so cell makers serving Europe and the US depend more on NMC than Chinese makers do.

What to track

  • NMC share of EV battery deployment by region: A falling share in Europe or the US signals pressure on NMC-focused cell makers (Yearly · IEA Global EV Outlook)
  • NMC against LFP pack price gap: A wider gap speeds the shift to LFP (Yearly · BloombergNEF battery price survey)
  • Nickel and cobalt prices: Higher prices widen the NMC cost premium (Daily · LME)

For policymakers

Key learnings

  1. NMC cells tie EV supply chains to nickel and cobalt, so a country building NMC capacity also needs secure access to those metals.
  2. Regional rules that favour non-Chinese supply chains tend to support NMC, where makers outside China are more established.
  3. The only cell capacity installed under India's incentive scheme by March 2026, about 1 GWh at Ola Electric, mainly targets NMC, so nickel and cobalt sourcing is already a question for India's first plants.

What to track

  • Chemistry mix of cell plants under the ACC PLI scheme: Shows how much imported nickel and cobalt Indian cell making will need (Yearly · Ministry of Heavy Industries; IEEFA)
  • EV battery demand forecasts: Higher demand raises the value of securing cell and metal supply (Yearly · IEA; India battery demand studies)

India

India depends on imports for close to 100% of its battery cells; Ola Electric, the only firm with capacity installed under the cell incentive scheme by March 2026 (about 1 GWh), mainly targets NMC.

Sources

  1. Price correlation, Material Insights, Material Insights (World Bank, FRED, IMF data)
  2. Global EV Outlook 2026: Electric vehicle batteries, IEA (2026)
  3. Lithium-ion battery pack prices fall to $108 per kilowatt-hour despite rising metal prices, BloombergNEF (2025)
  4. Assessing India's ACC PLI scheme, IEEFA and JMK Research (2026)
  5. Rajya Sabha unstarred question 3908: PLI scheme for ACC battery storage, Ministry of Heavy Industries, Government of India (2026)