Exploring market instability of global lithium resources based on chaotic dynamics analysis

Donghui Liu, Xiangyun Gao, Haizhong An, Nanfei Jia and Anjian Wang

Resources Policy, 2024, vol. 88, issue C

Abstract: Driven by emerging technologies such as batteries in electric vehicles (EVs), global lithium market undergoes significant changes. To explore market instability of global lithium resources subjected to EV development, lithium exploration, and carbon constraints, a model of global lithium markets-electric vehicle development-carbon constraints (GL-EV-CC) is established based on a four-dimensional difference equation feedback system. Accordingly, a detailed analysis strategy by virtue of bifurcation and chaotic theory is investigated, with which some sudden changes and critical points can be obtained to provide some implications in face of the challenges of future market changes. Results show that lithium demand for EVs will evolve from an equilibrium state to a periodic state and finally to a chaotic state with the continuous change of the degree of investment in Research and Development (R&D) of EVs. When the degree of exploration is less than 0.15, attention should be given to the resource exhausted crisis. When the degree of carbon constraint is high, market instability of lithium demand should be fairly concerned, while when the degree of carbon constraint is low, market instability of lithium supply should be focused. Unlike previous studies, chaotic dynamic analysis is employed in this study, and thereby not only a broader sensitivity analysis but also complex dynamic behaviors such as chaotic behavior at the moment of equilibrium can be explored, in which feasible policies can be proposed to control some policy parameters to be within a reasonable range.

Keywords: Global lithium market; Market instability; Feedback system; Chaotic dynamics; Bifurcation theory (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:88:y:2024:i:c:s030142072301084x

DOI: 10.1016/j.resourpol.2023.104373

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