ELECTRIC VEHICLES AND CRITICAL RAW MATERIALS

Beatrix Varga () and Kitti Fodor ()
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Beatrix Varga: Department of Business Statistics and Economic Forecasting, Faculty of Economics, University of Miskolc, Miskolc, Hungary
Kitti Fodor: Department of Business Statistics and Economic Forecasting, Faculty of Economics, University of Miskolc, Miskolc, Hungary

Annals of Faculty of Economics, 2019, vol. 1, issue 2, 444-455

Abstract: In the 21st century transportation became one of most the most important aspects of our life. People use a lot of ways of travelling to work or having fun. Nowadays, the most popular innovations are electric cars. For this green solution critical raw materials are needed. Production of a lithium-ion battery requires a wide scale of elements and materials, like cobalt. There are several reasons that cobalt is one of the most important elements. One reason is that the main supplier is the politically instable the Democratic Republic of the Congo. In 2017 Fund For Peace ranked the Democtaric Republic of the Congo as the 7th most unstable country in the World. Mol analysts believe that the future of electric cars really depends on the Democtaric Republic of the Congo. The Democratic Republic of the Congo holds a significant porportion (57%) of the cobalt stock. Due to technological improvements in battery production, new types and solutions will become available in the next decade. One of the most anticipated technological developments is the solid battery. Some electric car companies see nickel as a potential solution, but this has both advantages and disadvantages. Attempts are being made to eliminate cobalt from the production process. Another pessimistic survey from DERA shows that cobalt consumption in the area of e-mobility will likely increase. In addition, it is important to note that the raw material market is highly concentrated, with many countries having a monopoly position. To measure market concentration, we selected the Herfindahl-Hirschman index and examined the value of some of the raw materials needed to produce the lithium-ion battery. The price of cobalt has a strong influence on the price of batteries and of electric cars. Forecasts say that if the price of electric cars were more favourable, they would soon become more popular. In summary, critical materials have a serious effect on transportation, and we examine the past, present and the future.

Keywords: cobalt; CRM; electric car; transport; economic aspect (search for similar items in EconPapers)
JEL-codes: L62 (search for similar items in EconPapers)
Date: 2019
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