Summary
Nickel is a key component of lithium-ion battery cathodes — specifically NMC (nickel-manganese-cobalt) and NCA (nickel-cobalt-aluminum) chemistries, which have been the dominant high-energy-density cathode chemistries for EVs. Indonesia now controls approximately 40% of global nickel supply, and Chinese operators control 70–75% of Indonesian nickel processing capacity, creating a double concentration risk. However, the market is shifting: LFP (lithium iron phosphate, nickel-free) reached 50% of the global EV battery market in 2025, and most solid-state and lithium-sulfur programs in this knowledge base use cathode chemistries that reduce or eliminate nickel dependence.
Key Facts
- Chemical formula: Ni (atomic number 28)
- Primary battery uses: Cathode active material in NMC (Li(Ni,Mn,Co)O₂) and NCA (LiNiCoAlO₂); not used in LFP, Li-S, or pure lithium-metal cathode designs
- Global production (2024): ~3.5 million metric tons; Indonesia leads by volume
- Top producing countries: Indonesia (~40%), Philippines (~9%), Russia (~7%), Canada, Australia
- Indonesian processing: Chinese operators and Chinese-Indonesian JVs control ~70–75% of Indonesia’s refined nickel capacity (~1.6–1.7 million tonnes of 2.2 million MT total capacity)
- Market shift (2025): NMC market share in China fell from 25% to 18% in the first 9 months of 2025; LFP reached 50% of the global EV battery market — both driven by cost and supply chain concerns
- Battery-grade nickel: Class I nickel (high-purity, suitable for batteries) is distinct from Class II (stainless steel-grade); Indonesia’s production is predominantly Class II / intermediate, requiring conversion
Major Producers / Processors
| Company | Country | Position | Notes |
|---|---|---|---|
| Various Indonesian producers / Chinese JVs | Indonesia / China | Mining + HPAL processing | Indonesian-Chinese joint ventures dominate laterite nickel conversion; complex geopolitical web |
| Vale (NYSE: VALE) | Brazil | Mining (Canada, Indonesia, Brazil) | Major Class I nickel producer; Sudbury and Voisey’s Bay mines (Canada) |
| Norilsk Nickel / Nornickel | Russia | Mining + refining | Major sulfide nickel producer; ~7% of global supply; sanctions risk for Western buyers |
| BHP (ASX: BHP) | Australia | Mining | Nickel West (WA); Class I nickel; BHP considering exit from nickel as of 2025 due to Indonesian competition |
| Glencore | Switzerland | Trading + mining | Significant nickel position globally |
Supply Chain Position
Nickel flows into the battery supply chain primarily at the Precursor Chemicals → Cathode Active Materials layer: mined nickel (or nickel intermediates from HPAL processing) is converted into mixed hydroxide precipitate (MHP), then into NMC precursor (pCAM), then into cathode active material.
Why nickel reduction matters for documented companies:
- Lyten (Li-S chemistry): Zero nickel — sulfur cathode and lithium metal anode use no transition metals.
- Factorial Energy: FEST® cells can use NMC cathodes (including high-nickel NMC811 or NMC90+), but the partnership with POSCO Future M is exploring Ultra Hi-Ni single-crystal cathodes that maximize energy per gram of nickel rather than requiring more nickel by volume. Overall nickel content per kWh is lower than NMC622 or NMC811 designs in some solid-state configurations.
- Adden Energy, QuantumScape, Solid Power, ProLogium: All use lithium metal anodes, which allow flexibility in cathode chemistry; the cathode specifics for commercial-scale cells are not fully disclosed but can be adapted to cobalt-free, lower-nickel formulations.
- Idemitsu Kosan: Supplies electrolyte; cathode nickel content is Toyota’s design choice.
- Donut Lab: TiO₂-based design; no nickel in the cathode.
Geopolitical Risk Assessment
Nickel’s supply chain risk has shifted from Russia to Indonesia. Pre-2022, Russia (Nornickel) was the marquee supplier of high-purity Class I nickel; since the Ukraine war, Western buyers have actively shifted away from Russian nickel, accelerating Indonesian/Chinese-controlled supply. The result is a different but comparable concentration risk: ~70–75% of Indonesian nickel processing is Chinese-operated, meaning the effective “China dependency” for battery-grade nickel is similar to cobalt.
The market response has been structural: the shift to LFP (nickel-free) batteries is not just about cost but about supply chain resilience. For advanced battery developers, the ability to use sulfur or low-nickel cathode chemistries is increasingly a selling point to OEM partners concerned about 2030s supply security.
Note on surplus: As of early 2026, the nickel market is oversupplied due to Indonesian capacity expansion, keeping prices relatively low (~$15,000/ton on LME). This reduces the immediate price risk but does not eliminate the concentration risk.