The EV Revolution: Critical Material Supply Chains, Trade, and Development

The emergence of a mass market for Electric vehicles (EVs) offers considerable development opportunities for countries that have abundant resources of cobalt, nickel, lithium, copper, aluminium, and manganese. Not surprisingly, developing countries have proposed ambitious plans to expand their domestic EV raw material sectors. However, because of the complexity, opacity, and volatility in these industries it is important that the implications of the changing demand for the critical materials needed by the EV global value chain and carefully understood. One observation from the resource curse literature is that countries need to strengthen their institutions if they are to mitigate the risk of poorly directed, often excessively procyclical, investment. In this paper we draw on results from the CoMIT model (Jones et al. 2020) to help analyse the outlook for EV demand and associated raw material usage paying particular attention to the key drivers and sensitivities required to track future market transformations. We assess key fiscal, regulatory, environmental, and institution reform priorities and the market barriers that may prevent successful domestic resource mobilisation in these resource chains.