Material Insights · Understanding the Material World

Nickel-rich lithium-ion batteries and Vehicles, ships, rail, aircraft

Nickel-rich cells are the battery of choice for long-range and premium electric cars, and almost 80% of EV batteries outside China still used nickel chemistries in 2025, but cheaper LFP now takes over half of the world market, so carmakers' chemistry choices decide nickel and cobalt demand.

Nickel-rich lithium-ion batteries (energy) and Vehicles, ships, rail, aircraft (industry): 4 relationships.

How they are linked

1. Industry input

Physical flow · Strong · Nickel-rich cells to EV makers

Nickel-rich NMC cells are one of the two main chemistries in electric vehicle battery packs; the site rates them 5 of 5 for EV battery cell and materials makers, for whom they are the core product.

  • 5 of 5 criticality for EV battery cell and materials makers
  • 1.2 TWh EV battery deployment worldwide, 2025

EV battery deployment grew by almost 30% in 2025 to 1.2 TWh, with China taking about 60% of it. Batteries are still a niche in ships, rail and aircraft, so the dependence on nickel-rich cells sits mainly in road vehicles.

Enterprise types that depend on it:

  • EV battery cell and materials makers: core product (criticality 5 of 5)

Sources: Material Insights; IEA

2. Losing share to LFP

Substitution · Rising · LFP cells replace nickel-rich cells in mass-market cars

Lithium iron phosphate cells hold less energy per kilogram but cost much less and use no nickel or cobalt, so carmakers choose them wherever range matters less than price.

  • over 55% LFP share of EV batteries deployed worldwide, 2025
  • nearly 50% LFP share, 2024
  • more than 40% price advantage of LFP packs over NMC per kWh, 2025

The split is regional: almost 80% of batteries outside China used nickel chemistries in 2025, while LFP held only a little over 10% of EU demand. Nickel-rich cells keep the premium, long-range and performance segments, where buyers pay for range; the risk for nickel suppliers is that cheaper LFP keeps spreading down from China into Europe and emerging markets.

Sources: IEA

3. Cobalt and cell supply concentrated

Shared risk · Strong · Supply shocks in Congo and China reach carmakers

NMC cathodes need cobalt, most of which is mined in Congo, and most cells are made in China, so a decision in either country can change cost and availability for carmakers using nickel-rich cells.

  • about 70% Congo share of world cobalt output, 2024
  • 96,600 t Congo annual cobalt export quota, 2026 and 2027
  • over 80% China share of battery cell manufacturing capacity, 2025

Congo suspended cobalt exports in February 2025 after prices hit a nine-year low, then replaced the ban with annual quotas from October 2025. LFP carmakers are not exposed to cobalt at all, so the quota regime widens the cost gap between the two chemistries. Cell supply outside China is small: the EU and the US each held only 6 to 7% of capacity in 2025.

Sources: IEA; Mining Weekly (Reuters)

4. India's cell incentive scheme

Policy · High in India · Indian policy aims to localise cells for Indian EV makers

India makes EVs but imports almost all its cells, so it launched a production-linked incentive scheme for advanced chemistry cells to build domestic supply.

  • 50 GWh cell capacity targeted by 2025 under the ACC PLI scheme
  • ₹18,100 crore scheme outlay, 2021
  • 1.4 GWh capacity commissioned on time, October 2025

About 40 GWh of the 50 GWh target had been allocated, but the only capacity commissioned on time by October 2025 was Ola Electric's 1.4 GWh, and import dependence for cells was still close to 100%. Ola later scaled its plan back from 20 GWh to about 5 GWh by FY29, and no incentives had been paid out by January 2026.

Sources: Down To Earth

For investors

Key learnings

  1. Nickel-rich cells are now the premium chemistry: LFP took over 55% of EV batteries in 2025, so nickel and cobalt demand depends on how large the long-range segment stays.
  2. The price gap matters more than the energy gap: LFP packs were more than 40% cheaper per kWh in 2025, which keeps pushing mass-market models away from NMC.
  3. Congo's cobalt quotas and China's over 80% share of cell capacity are concentrated risks that hit NMC users and largely spare LFP users.

What to track

  • LFP versus nickel chemistry share of EV batteries: A rising LFP share outside China cuts nickel and cobalt demand from cars (Yearly · IEA Global EV Outlook; monthly · battery trackers)
  • Cobalt price and Congo export quota use: Tighter quotas raise NMC cell costs and widen the gap with LFP (Monthly · LME, Congo regulator announcements)
  • Premium and long-range EV sales: Shows whether the segment that needs nickel-rich cells is growing (Monthly · carmaker sales reports)

For policymakers

Key learnings

  1. India's cell imports were still close to 100% in late 2025, with only 1.4 GWh of the 50 GWh PLI target commissioned on time.
  2. Choosing NMC over LFP ties a country's EV industry to cobalt mined mostly in Congo as well as to cell and material supply concentrated in China, so chemistry choice is also a supply security choice.
  3. Global cell capacity is over 80% in China, so incentive schemes need cathode and material supply, not only cell assembly, to reduce dependence.

What to track

  • ACC PLI capacity commissioned: Shows whether domestic cell supply is replacing imports (Quarterly · Ministry of Heavy Industries)
  • Lithium-ion cell imports by source country: Measures dependence on China for EV batteries (Monthly · Ministry of Commerce trade data)

India

India imports almost all its EV cells; under the ₹18,100 crore ACC PLI scheme only 1.4 GWh of a 50 GWh target had been commissioned on time by October 2025, all of it by Ola Electric.

Sources

  1. Vehicles, ships, rail, aircraft: materials, Material Insights (2026)
  2. Global EV Outlook 2026: electric vehicle batteries, IEA (2026)
  3. Congo to replace cobalt export ban with quotas from Oct 16, Mining Weekly (Reuters) (2025)
  4. India's battery PLI scheme hit just 2.8% of target in 4 years, Down To Earth (2026)