Exploring the Development Potential of Critical Metals in New Energy Vehicles: Evidence from Megacity Shanghai, China

Abstract

As global efforts accelerate towards low-carbon transportation, power batteries from new energy vehicles (NEVs) have become critical resources, presenting both opportunities and environmental challenges. These batteries contain significant quantities of critical metals—such as nickel, cobalt, and lithium—that are crucial for the energy transition but face substantial supply risks. Megacities like Shanghai, leaders in NEV adoption, increasingly serve as significant reservoirs of these valuable materials. Maximizing the recovery of these metals from retired NEV batteries is therefore essential for enhancing resource security, minimizing environmental impacts, and promoting urban sustainability. This study employs a dynamic material flow model to estimate the demand and retirement volumes of critical metals in NEV power batteries in Shanghai from 2014 to 2050. Rather than assessing specific recycling technologies, this research evaluates the broader strategic, environmental, and economic benefits of recycling. Key findings include the following: (1) Annual peak demand for critical metals will range from approximately 0.3 to 34 thousand tons, with domestic cobalt production expected to be inadequate beyond 2029 under high-intensity adoption scenarios. (2) By 2050, the volume of discarded critical metals will surpass the demand for newly mined resources, reaching annual volumes of up to 29 thousand tons. The cumulative recoverable quantities from 2014 to 2050 are projected to range between 0.7 and 227 thousand tons for nickel, 2 and 43 thousand tons for cobalt, and 0.6 and 24 thousand tons for lithium. (3) Recycling these critical metals significantly reduces dependency on primary extraction, lowers greenhouse gas emissions, prevents secondary pollution, and ensures economic sustainability. The study concludes with targeted policy recommendations to facilitate efficient and large-scale recovery of critical metals from NEV batteries in Shanghai. Harnessing this urban resource stream can reinforce China’s strategic metal supply chain and support the city’s sustainable, circular, and low-carbon development goals.

1. Introduction

Critical metals—such as nickel, cobalt, and lithium—play a foundational role in advancing low-carbon technologies, achieving national strategic goals, and supporting defense capabilities. However, these resources are increasingly subject to severe supply risks, raising urgent concerns over long-term energy and resource security [1,2]. Ensuring a stable and sustainable supply of critical metals is no longer optional—it is central to national resilience and the success of global decarbonization efforts. Yet, the gap between rising demand and limited supply is widening, and strategic competition is intensifying [1]. On the demand side, the International Energy Agency (IEA) forecasts that by 2030, the demand for critical metals in clean energy applications will more than double [3]. In response, many major economies have elevated critical metal resources to a strategic priority. Countries in Europe and North America are accelerating policy measures and investments to secure access, build recycling capacity, and strengthen supply chains [4]. Notably, the U.S. Department of Defense has emphasized critical metal supply security as a cornerstone of its climate, energy, and national defense strategy, as outlined in its National Security Strategy [4]. These developments reflect a growing consensus: the transition to sustainable energy cannot proceed without robust planning for critical material resilience. On the supply side, the outlook remains uncertain. According to the IEA, metals such as nickel, cobalt, and lithium face multiple risks—limited reserves, underdeveloped production capacity, and vulnerability to trade disruptions and geopolitical shocks [1,5]. China, despite its leading role in clean energy deployment, faces serious constraints. Domestic reserves of manganese and nickel may last fewer than 10 years, while lithium and cobalt reserves may be exhausted in less than 30 years. Furthermore, the country’s import dependency is high, exceeding 50% for lithium and manganese, and over 90% for cobalt and nickel [1]. External factors—such as export restrictions, trade protectionism, and geopolitical tensions—are expected to further undermine supply stability, deepening the risk of systemic imbalances [4]. These converging pressures highlight a critical sustainability challenge: the need to balance rapid clean energy expansion with long-term resource security. Addressing this challenge will require integrated strategies that include urban mining, material recycling, international cooperation, and innovation in substitution technologies. Without such measures, the global low-carbon transition may be slowed not by technology or ambition—but by a lack of materials to power it.

As global efforts to combat climate change intensify, the demand for critical metals—such as nickel, cobalt, lithium, and manganese—has risen sharply. These metals are indispensable to clean energy technologies, particularly electric vehicles (EVs), which are central to achieving carbon neutrality goals. However, this growing dependence has exposed serious vulnerabilities in global supply chains, making the sustainable and secure supply of critical metals an urgent strategic priority. China has positioned new energy vehicles (NEVs) at the core of its climate and green development strategy [6,7]. As of 2023, the country has led the world in NEV production and sales for several consecutive years, with over 18 million vehicles in operation—more than half of the global total [8]. In this rapid transition, megacities have emerged as critical nodes, both driving NEV adoption and facing the complex sustainability challenges that accompany large-scale technological change. According to national classification standards, megacities are urban areas with populations exceeding 10 million, while large cities host between 5 and 10 million residents. These dense urban centers are not only leaders in low-carbon transport transformation but also emerging hotspots for “urban mining”—the recovery of valuable resources from end-of-life products. Shanghai exemplifies this dual role [9]. As a strategic demonstration zone for China’s NEV industry and a global innovation hub, Shanghai is actively reshaping its transport system to align with sustainability goals. By the end of 2023, the city had installed 196,000 public and dedicated charging piles [10] and reached 1.288 million NEVs in operation—the highest number among global cities [11]. Plans are underway to raise annual NEV production capacity above 1.2 million units by 2025 [12]. As NEVs begin to reach the end of their service life, their power batteries—rich in critical metals—represent a significant and growing secondary resource. In the context of depleting primary reserves and growing import dependence, these retired batteries offer not just a waste management challenge, but a strategic opportunity. Harnessing the recycling potential of NEVs in megacities like Shanghai could play a vital role in reducing resource pressure, stabilizing metal supply chains, and contributing to a more circular and resilient economy. This study uses Shanghai as a case study to explore the development potential of critical metals embedded in retired NEV power batteries. It aims to provide theoretical support and practical insights to advance urban mining, enhance the strategic security of critical metal resources, and inform policy frameworks that support sustainable urban transitions. Recent advances in sustainable cathode regeneration and high-energy-density anode material engineering further highlight the feasibility of integrating advanced recycling technologies into urban mining systems, thereby enhancing the circular supply of critical metals for next-generation batteries [13,14]. Furthermore, recent evidence highlights end-of-life EV battery supply scenarios and evaluates the impacts of recycling and second-use pathways on future battery demand and greenhouse gas (GHG) emission reductions at the regional scale in California through 2050 [15].

Compared to other megacities such as Shenzhen or Guangzhou, Shanghai enforces particularly stringent license plate restrictions and faces tighter urban density limits, which suppress overall vehicle ownership but accelerate BEV adoption. These localized constraints reshape per capita metal demand trajectories and result in a steeper material accumulation curve over time. However, few studies have examined how such city-specific governance factors quantitatively affect critical material flows, leaving an important empirical gap that this study seeks to address.

As countries worldwide advance toward carbon neutrality, the demand for critical metals has intensified, making their secure and sustainable supply a matter of strategic importance. These metals—indispensable for electric vehicle (EV) batteries—are not only vital to decarbonization goals but also increasingly constrained by geopolitical, economic, and environmental challenges. In this context, research on the material demand and recycling potential of critical metals in the EV sector has gained significant momentum. This body of work can be broadly grouped into two areas: demand forecasting and recycling strategies. The first research focus examines the rising demand for critical metals associated with EV deployment across various spatial scales. Scholars have modeled this demand at global, regional, national, and provincial levels [16,17,18,19,20,21]. For example, Habib et al. (2020) [18] projected global demand for key metals such as cobalt, lithium, and nickel from EVs through 2050. Baars et al. (2021) [17] analyzed cobalt flows in power batteries within the European Union, while An et al. (2022) [16] investigated the impact of EV growth on China’s copper consumption. At the subnational level, Huang et al. (2020) [19] assessed how increased EV penetration could elevate copper demand in Fujian Province by mid-century. These studies reveal the scale and distribution of resource pressures, underscoring the need for proactive, regionally tailored strategies. The second area of research centers on critical metal recycling, with growing recognition that circular economy practices are essential to reducing reliance on primary extraction. Huang et al. (2023) [6] explored the delayed benefits of recycling on future metal availability, while Liu et al. (2022) [22] found that even under optimistic recycling scenarios, China may still face persistent supply shortfalls. Li et al. (2023) [23] identified retired EV batteries as a key future source of secondary cobalt, and Wang et al. (2022) [24] demonstrated that recycling rare earth elements from end-of-life EVs could significantly reduce demand for virgin materials. These studies suggest that while recycling alone may not fully bridge the supply gap, it remains a critical pillar of sustainable resource governance. Methodologically, the majority of studies apply scenario-based material flow analysis (MFA) to quantify long-term trends and assess sustainability outcomes [6,22,24,25,26,27,28]. Scenario designs generally fall into two categories. The first integrates EV adoption trends with demographic projections, energy policies, and international climate targets—such as those established by the United Nations and the International Energy Agency [22,25,27]. The second examines technical pathways, accounting for variations in battery materials [6], recycling rates [24], historical parameter trends [25], and service life assumptions [28]. To enhance model accuracy, researchers often apply statistical distributions—including Weibull, normal, exponential, and gamma functions—to represent the lifespan of EVs and batteries. In parallel, logistic and cosine functions are used to simulate changes in EV stock and sales over time [27,29,30]. These tools support more robust scenario planning and inform policy decisions aimed at closing resource loops and strengthening the resilience of future supply systems.

As the global transition to low-carbon energy accelerates, the strategic importance of critical metals—such as lithium, cobalt, nickel, and manganese—has become increasingly evident. These materials are fundamental to powering new energy vehicles (NEVs), yet concerns over supply security, uneven regional distribution, and environmental impact have made their sustainable management a pressing research and policy priority. While considerable progress has been made in projecting future demand and exploring recycling strategies, current studies still face important limitations that constrain their relevance to local decision-making and urban sustainability planning. One major limitation is the predominant focus on global, national, or provincial scales. Although such studies offer valuable insights, provincial-level analyses often aggregate data across cities with varying industrial bases, development trajectories, and resource conditions. As a result, their findings are less applicable to the specific governance, infrastructure, and sustainability challenges faced by individual cities. By contrast, this study focuses on Shanghai, a leading megacity in China that has emerged as a national benchmark for NEV deployment, battery recycling technology, and green innovation. With over 10 million permanent residents and the highest number of NEVs in operation among global cities, Shanghai provides a compelling case for exploring how city-scale strategies can contribute to national resource security and sustainable urban development. Despite the critical role megacities play in advancing low-carbon technologies, research at the city level remains limited. Few studies systematically assess the potential of end-of-life NEV power batteries as a source of secondary critical metals in an urban context. Moreover, existing research tends to concentrate on a single battery chemistry, material, or vehicle category, overlooking the complexity and heterogeneity of real-world systems. Future development scenarios are often based on global benchmarks—such as the Paris Agreement’s 1.5 °C pathway [24] or national carbon neutrality targets [30]—which, while important, fail to reflect the leadership and specificity of municipal climate and industrial policies. Additionally, while many studies provide estimates of future scrappage volumes, few examine the broader strategic, environmental, and economic benefits of critical metal recovery. As urban mining becomes an increasingly viable component of circular economy strategies, it is essential to move beyond volumetric assessments and consider how recycling can contribute to carbon reduction, economic resilience, and resource self-sufficiency at the city level. To address these gaps, this study takes Shanghai as a case example and applies dynamic material flow analysis to estimate the stock, demand, and end-of-life flows of critical metals in NEV power batteries from 2014 to 2050. By constructing seven development scenarios, it captures a range of market and policy trajectories. Furthermore, the study evaluates the strategic, environmental, and economic benefits of recycling these metals, offering evidence-based insights to support refined, city-level resource governance and contribute to broader national sustainability goals.

Recent literature calls for deeper integration of policy, governance, and financial risk variables into urban sustainability modeling. For example, Chen and Weng (2024) [31] highlight that policy disclosure intensity significantly affects EV adoption and downstream economic effects. Similarly, Huang et al. (2025) [32] apply fuzzy-DEMATEL approaches to identify systemic risks in China’s NEV supply chain, emphasizing the role of institutional prioritization in risk propagation [31,32].

This study contributes both theoretically and empirically. Theoretically, it refines dynamic material flow modeling by incorporating urban policy saturation, battery technology evolution, and spatial vehicle density constraints. Empirically, it provides a rare city-level assessment using Shanghai as a case study, offering comparative metrics for national policy design and international benchmarking.

While Shanghai serves as the primary case in this study due to its pioneering role in NEV deployment and recycling policies, the dynamic material flow model and scenario design employed here are not unique to this city. These methods have been widely applied in prior studies at various spatial scales, and can be adapted to assess critical metal demand and recycling potential in other contexts, including resource-based cities or small- and medium-sized cities. The adaptability lies in recalibrating key input parameters—such as population growth, vehicle ownership saturation, technology mix, and policy incentives—according to local conditions. Such cross-city applicability enhances the generalizability and academic value of the research, while allowing future work to test the model under diverse urban, industrial, and policy environments.

2. Research Methodology and Data Sources

2.1. Concept Definition

This study focuses on privately owned small passenger vehicles within the broader category of new energy vehicles (NEVs), excluding commercial vehicles. Among NEVs, the primary technologies include battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs). However, recent market data underscore the limited role of FCVs. In the first three quarters of 2023, China recorded sales of just 3000 FCVs, compared to 4.468 million BEVs and 1.807 million PHEVs [33]. Given their negligible market presence and limited contribution to battery-related material flows, FCVs are excluded from this analysis. By concentrating on BEVs and PHEVs—the dominant technologies driving China’s low-carbon mobility transition—this study aligns its scope with current market realities and policy priorities. Because critical metals such as lithium, cobalt, and nickel are primarily embedded in the power batteries of these vehicles, the analysis focuses specifically on estimating the stock, demand, and end-of-life flows of critical metals within BEV and PHEV battery systems. This targeted approach enhances the policy relevance of the study, offering practical insights for improving resource efficiency, supporting circular economy strategies, and informing sustainable urban mobility planning.

2.2. System Definition

Figure 1 illustrates the material flow of critical metals associated with end-of-life new energy passenger vehicles in Shanghai. The cycle begins with the extraction and refining of critical metals, which are then used in the production of new energy vehicles and introduced into the market. After a period of consumer use, these vehicles reach the end-of-life phase, where their power batteries become a significant source of recyclable materials. At this stage, a portion of the critical metals is recovered and reintegrated into the production system, supporting the manufacture of new vehicles and reinforcing the circular use of resources. However, a considerable fraction is not recycled and exits the system, highlighting existing inefficiencies and missed opportunities for resource recovery. To ensure clarity and focus, this study does not consider cross-border trade flows such as imports and exports. The analysis covers the period from 2014 to 2050 and is geographically limited to Shanghai—a megacity at the forefront of China’s low-carbon transition. By examining material flows at the city level, this study contributes to a deeper understanding of how urban systems can enhance critical metal recovery, reduce resource dependency, and support sustainable, circular development pathways.

2.3. Models and Methods

2.3.1. Calculation Method for the Stock of New Energy Passenger Vehicles

To support long-term planning for sustainable urban mobility and resource management, this study estimates the stock of new energy passenger vehicles (NEVs) in Shanghai over the period 2014–2050. The calculation is divided into two phases: a historical reconstruction (2014–2022) and a forward projection (2023–2050). For the period 2014–2020, official stock data for battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) are limited. To address this gap, a dynamic material flow approach is employed, whereby the annual stock is derived by subtracting the cumulative number of retired vehicles from cumulative sales. This method allows for a robust estimation of stock levels during the initial phase of NEV development. For the years 2021 and 2022, stock values are based on official figures reported by Shanghai Automobile Industry Association (2022) [34] and Yili Vehicle Knowledge Network (2022) [35], ensuring alignment with the most up-to-date and reliable data available. For the projection period (2023–2050), stock levels (S) are estimated using a population-based forecasting model. This approach integrates Shanghai’s projected population (P), the per capita stock of passenger vehicles (SPC), and the expected share of NEVs in the total vehicle fleet (N). Together, these variables reflect both demographic trends and the city’s policy ambition to lead in low-carbon transportation. The calculation is structured as follows:

$$S_k(t)={\displaystyle \sum _t{F}_t^k(in)}-{\displaystyle \sum _t{F}_t^k}(out)$$

(1)

$$SPC(t)={\displaystyle \frac{K}{1+e^{a+bt}}}$$

(2)

$$S_k(t)=SPC(t)\times P(t)\times N_k(t)$$

(3)

In Equation (1), $S_k(t)$ represents the ownership of class $k$ new energy passenger vehicles in year $t$, ${\displaystyle \sum _t{F}_t^k(in)}$ is the cumulative sales volume of class k new energy passenger vehicles in year $t$, and ${\displaystyle \sum _t{F}_t^k}(out)$ is the cumulative scrap volume of class $k$ new energy passenger vehicles in year $t$. The formula of sales volume and scrap volume will be explained in Section 2.3.2. In Formula (2), $SPC(t)$ represents the per capita passenger car ownership in the $t$ year, assuming that it obeys the logistic curve tending to the saturation point $k$. In Formula (3), $P(t)$ denotes the population in the $t$ year; $N_k(t)$ represents the proportion of $k$ class new energy passenger vehicles in year $t$. The trend of the proportion of BEVs and PHEVs in passenger vehicles is modeled by the cosine function [27,29]:

$$N_k(t)={\displaystyle \frac{({\widehat{N}}_k-N_{k,0})}{2}}\left(1-COS\left({\displaystyle \frac{\pi (t-t_0)}{t_1-t_0}}\right)\right)+N_{k,0}$$

(4)

In Equation (4), $N_{k,0}$ and ${\widehat{N}}_k$ are the proportion and saturation proportion of $k$ new energy passenger vehicles in 2021, respectively; $t_0$ is the initial year (2021); and $t_1$ is the year when the saturation value is reached.

2.3.2. Calculation Method for the Disposal Volume of New Energy Passenger Vehicles

Understanding the service life of new energy vehicles (NEVs) is critical for anticipating end-of-life flows, planning recycling infrastructure, and supporting circular economy strategies. Among the available modeling approaches, the normal distribution is frequently used to estimate the lifespan of passenger vehicles and predict their retirement volume due to its empirical reliability and ease of application [24,27,36]. In this study, the normal distribution is applied to characterize the service life of different types of new energy passenger vehicles. This enables more accurate forecasting of vehicle retirements, which is essential for evaluating the timing and scale of battery disposal and the associated potential for critical metal recovery. The probability density function used to model vehicle lifespans is defined as follows:

$$f(x)={\displaystyle \frac{1}{\sqrt{2\pi }\mathrm{\sigma }}}\exp \left(-{\displaystyle \frac{{(x-\mathrm{\mu })}^2}{2{\mathrm{\sigma }}^2}}\right)$$

(5)

In Equation (5), μ is the average service life; σ is the standard deviation of the average service life. In this paper, μ is set to 12 years [24] and 16 years [36] for BEVs and PHEVs, respectively, and σ is set to 30% of their average service life. The end-of-life rates of BEVs and PHEVs are shown in the Figure 2.

To inform sustainable urban planning and circular resource strategies, this study combines a vehicle service life model with a dynamic material flow analysis (DMFA) to estimate the annual retirement of new energy passenger vehicles (NEVs) in Shanghai. Specifically, the scrappage volumes of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) are calculated separately, based on their respective lifespan distributions. The sum of these two estimates provides the total volume of NEVs expected to reach end-of-life in a given year. This figure serves as a foundational input for projecting the future availability of recyclable power batteries and the recovery potential of critical metals—key considerations for resource efficiency and low-carbon urban development. The calculation is expressed by the following equations:

$$F_t^k(out)={\displaystyle \sum _{i=2014}^{t-1}{F}_i^k\left(in\right)}\times f_k(t-i)$$

(6)

$$F_t^k\left(in\right)=S_k\left(t\right)-S_k\left(t-1\right)+F_t^k\left(out\right)$$

(7)

In Equation (6), $F_t^k(out)$ denotes the theoretical end-of-life quantity of $k$ new energy passenger vehicles in the target year $t$, and $f_k(t-i)$ denotes the probability that $k$ new energy passenger vehicles produced in year $i$ will be end-of-life in year $t$. In Equation (7), $F_t^k\left(in\right)$ denotes the theoretical demand quantity of k new energy passenger vehicles in year $t$.

2.3.3. Calculation Method for the Stock, Demand, and Disposal Volume of Critical Metals in Discarded New Energy Passenger Vehicle Power Batteries

Based on the retention ($S_k(t)$), demand ($F_t^k(in)$), and scrappage ($F_t^k\left(out\right)$) of new energy passenger vehicles in each target year, combined with the research results of related scholars [37], assuming that $M_{stock,j}^k(t)$ is the stock of critical metal $j$ in the power accumulator of k new energy passenger vehicles in year $t$, $M_{in,j}^k(t)$ is the theoretical demand of critical metal $j$ in the power accumulator of $k$ new energy passenger vehicles in year $t$, and $M_{out,j}^k(t)$ is the theoretical scrap amount of critical metal $j$ in the power accumulator of $k$ new energy passenger vehicles in year $t$. The stock, demand, and scrappage of the main critical metals in the power battery of new energy passenger vehicles in the target year can be calculated according to the following model formula:

$$M_{stock,j}^k(t)=S_k(t)\times I_j^k$$

(8)

$$I_j^k=C_k\times B_j$$

(9)

$$M_{in,j}^k(t)=F_t^k(in)\times I_j^k$$

(10)

$$M_{out,j}^k(t)=F_t^k\left(out\right)\times I_j^k$$

(11)

In Equation (8), $I_j^k$ represents the content of $j$ critical metals in $k$ types of power storage batteries for new energy passenger vehicles. In Equation (9), $C_k$ represents the capacity of $k$ types of power storage batteries for new energy passenger vehicles, and $B_j$ represents the content of critical metal $j$ in ternary lithium batteries (lithium nickel manganese cobalt oxide [NMC]/lithium nickel cobalt aluminum oxide [NCA]), lithium iron phosphate batteries (LFP), lithium manganese oxide batteries (LMO), and sodium ion batteries (SIB).

2.3.4. Calculation Method for the Demand and Disposal Volume of Ternary Batteries and New Energy Vehicles Based on the Consistency Analysis of Battery and Vehicle Lifespan

In Equation (12), $Inflo{w}_{L_B}(t)$ represents the demand for lithium-ion batteries in year $t$, $Stoc{k}_{EV}(t)$ represents the stock of electric vehicles in year $t$, $Stoc{k}_{EV}(t-1)$ represents the stock of electric vehicles in year $t-i$, and $Outflo{w}_{L_B}(t)$ represents the end-of-life quantity of lithium-ion batteries in year $t$. In Equation (13), $Outflo{w}_{EV}(t)$ represents the end-of-life volume of electric vehicles in year $t$, and in $Outflo{w}_{EV}(t-i)$, $i$ is the service life of lithium-ion batteries, which represents the end-of-life volume of lithium-ion batteries in electric vehicles in year $t-i$. In Equation (14), $f(t-m)$ represents the probability of the production of vehicles to be scrapped in year $t$.

$$Inflo{w}_{L_B}(t)=Stoc{k}_{EV}(t)-Stoc{k}_{EV}(t-1)+Outflo{w}_{L_B}(t)$$

(12)

$$Outflo{w}_{L_B}(t)=Outflo{w}_{EV}(t)+Outflo{w}_{EV}(t-i)$$

(13)

$$Outflo{w}_{EV}(t)={\displaystyle \sum _{m=t_0}^{t-1}\inf lo{w}_{EV}(m)\times f}(t-m)$$

(14)

$$Inflo{w}_{L_B}(t)=Stoc{k}_{EV}(t)-Stoc{k}_{EV}(t-1)+Outflo{w}_{EV}(t)$$

(15)

$$Outflo{w}_{L_B}(t)={\displaystyle \sum _{m=t_0}^{t-1}\inf lo{w}_{EV}(m)\times f}(t-m)$$

(16)

2.4. Scenario Setting

Scenario analysis serves as a vital tool in sustainability research, enabling the exploration of plausible development pathways and their implications for long-term resource management [6,38]. By projecting future trends based on current trajectories, scenario analysis supports informed policy-making and promotes adaptive strategies that align with sustainability goals. In this study, scenario analysis is applied to anticipate future demand for key battery materials—lithium, cobalt, nickel, manganese, and sodium—driven by the growth of Shanghai’s new energy passenger vehicle sector. To reflect varying degrees of electrification, we construct three development scenarios for the adoption of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs): a baseline scenario, an intermediate growth scenario, and an accelerated transition scenario. These scenarios, modeled using Equation (4), offer insights into potential shifts in the composition of Shanghai’s vehicle fleet. Supporting data are detailed in Supplementary Table S1. To account for technological uncertainty and its impact on material consumption, the analysis further incorporates four battery use scenarios: a basic technology case, an advanced battery development case, a scenario where battery lifespan matches vehicle lifespan, and another where battery life is half that of the vehicle. These scenarios reflect real-world variability in battery performance and recycling potential, offering a nuanced view of material demand under different technological futures. Full parameter settings are provided in Supplementary Table S2.

2.4.1. Baseline Scenario

The electrification of transport plays a pivotal role in China’s transition toward a low-carbon economy and in fulfilling its dual carbon targets of peaking emissions and achieving carbon neutrality [7]. As part of this national agenda, local governments are introducing more targeted measures to accelerate systemic change. In 2021, the Shanghai Municipal Government enacted new regulations to promote the adoption of zero-emission vehicles. Effective 1 January 2023, green license plates—previously available to all new energy vehicles—are now issued exclusively to battery electric vehicles (BEVs), with plug-in hybrid electric vehicles (PHEVs) excluded from this policy incentive [39]. This marks a deliberate shift in regulatory support, signaling a clear preference for fully electric mobility solutions over transitional technologies.

Based on these policy developments and current fleet trends, this study defines a “baseline scenario” where BEVs experience moderate growth, reaching 50% of the total passenger vehicle fleet in Shanghai by 2050. In parallel, PHEVs are gradually phased out, reaching 0% share by the same year. This scenario reflects the continuation of current policy and market trajectories without major disruptions or breakthrough innovations. It offers a reference case against which more aggressive or conservative scenarios can be benchmarked.

2.4.2. Intermediate Scenario

Accelerating the adoption of battery electric vehicles (BEVs) is central to advancing urban sustainability and achieving long-term decarbonization goals. In this context, the Innovation Center for Energy and Transportation (ICET) estimates that by 2050, new energy vehicles (NEVs) will constitute approximately 79.31% of Shanghai’s passenger vehicle fleet [40]. This projection reflects a comprehensive evaluation of interrelated factors, including regional economic growth, vehicle density, restrictions on internal combustion engines, NEV market expansion, infrastructure development, technological innovation, and the effectiveness of local policy implementation.

Accordingly, this “intermediate scenario” assumes a faster trajectory of BEV adoption driven by cumulative policy efforts, market dynamics, and consumer acceptance. By 2050, BEVs are projected to comprise 79.31% of the city’s fleet, with PHEVs completely phased out by 2045. This scenario serves as a midpoint between conservative (baseline) and ambitious (intensified) futures, and aligns with recent national and municipal ambitions to lead the clean transportation transition.

2.4.3. Intensified Scenario

As cities around the world intensify efforts to decarbonize urban transport, global leaders such as London, Tokyo, New York, and Los Angeles have set clear targets to fully electrify their passenger vehicle fleets by 2050 [9]. For Shanghai—already recognized as a frontrunner in electric vehicle (EV) development—matching this timeline is not only necessary to maintain international leadership, but also crucial to aligning with broader sustainability objectives. A failure to do so risks undermining both national climate commitments and the city’s competitive edge in green innovation. Building on the projections of [41], and considering Shanghai’s consistently higher rate of new energy vehicle (NEV) adoption compared to the national average, this study adopts an ambitious yet plausible scenario: by 2050, battery electric vehicles (BEVs) are expected to comprise 97% of the city’s passenger vehicle fleet, with plug-in hybrid electric vehicles (PHEVs) fully phased out by 2040. This trajectory reflects not only technological readiness and supportive infrastructure, but also the policy ambition needed for a sustainable urban transition.

While the intensified scenario projects a 97% BEV share in Shanghai’s passenger fleet by 2050, this figure is not an arbitrary assumption. It aligns with both Shanghai’s short-term industrial roadmap and China’s long-term national vision for new energy vehicles (NEVs). According to the Shanghai Implementation Plan for Accelerating the Development of New Energy Vehicle Industry (2021–2025), the city targets an annual production capacity of over 1.2 million NEVs by 2025, with more than 50% of newly purchased vehicles being battery electric vehicles (BEVs) [12]. At the national level, the Energy-Saving and New Energy Vehicle Technology Roadmap 2.0, issued by the China Society of Automotive Engineers (CSAE), projects that NEVs will account for over 50% of total vehicle sales by 2035, with BEVs comprising more than 95% of those sales [42]. This trajectory justifies the use of 97% BEV penetration by 2050 as an ambitious but technically and politically plausible boundary scenario for urban sustainability modeling.

2.4.4. Basic Battery Scenario

Quantifying the demand for critical metals in power batteries is essential for evaluating the material sustainability of large-scale vehicle electrification. In 2023, lithium iron phosphate batteries (LFP) and ternary lithium batteries (NMC, NCA) made up 67.3% and 32.6% of total installations, respectively, according to data from the China Automotive Power Battery Industry Innovation Alliance [43]. Based on these figures, this study adopts a conservative scenario assuming stable market shares—67% for lithium iron phosphate batteries (LFP) and 33% for ternary lithium batteries (NMC, NCA)—over time. Under the baseline battery configuration, average capacities are set at 40 kWh for battery electric vehicles (BEVs) and 9 kWh for plug-in hybrid electric vehicles (PHEVs), reflecting current deployment trends. The estimated content of each critical metal (j) within a given battery type (k) is drawn from the dataset developed by [25]. Detailed assumptions on battery composition and market shares are available in Supplementary Table S3. These parameters provide a foundational basis for assessing future supply risks and informing circular economy strategies within the battery value chain.

2.4.5. Scenario of Battery Technology Progress

Sodium-ion batteries (SIB) have gained increasing attention as a viable alternative to conventional lithium-based chemistries, owing to their lower resource intensity, cost-effectiveness, and promising industrial scalability. As the transition to sustainable mobility accelerates, SIBs are expected to play an increasingly important role in reducing dependency on critical minerals while enhancing the resilience of energy storage supply chains.

This scenario reflects a forward-looking shift in battery technology, driven by a combination of policy support and technological innovation. Based on the market distribution reported by [6], ternary lithium batteries (NMC/NCA) and lithium iron phosphate batteries (LFP) are assumed to hold constant shares of 33% and 67%, respectively, in 2023. By 2050, however, SIBs are projected to capture 48% of the power battery market, with LFP and ternary battery shares declining to 35% and 17%, respectively. This transition is driven by anticipated breakthroughs in SIB cost performance, scalability, and supply chain advantages.

Battery capacities are also expected to rise significantly due to consumer preferences for longer driving ranges and improvements in energy density. Referring to the 72nd batch of the Catalog of New Energy Vehicle Models Exempt from Vehicle Purchase Tax issued by the Ministry of Industry and Information Technology (MIIT) in December 2023, this scenario assumes average battery capacities of 102.7 kWh for BEVs and 40.3 kWh for PHEVs by 2050.

These assumptions form the basis for assessing long-term trends in critical metal demand, improvements in material efficiency, and environmental implications of battery technology transformation. Detailed data on battery composition and market shares are provided in Supplementary Table S4.

This scenario is designed as an upper-bound technological trajectory to evaluate the potential material substitution effects of next-generation batteries. The 48% market share for SIBs is not intended as a forecast, but rather as a high-end assumption based on emerging literature. Ref. [44] model a scenario where sodium-ion batteries reach parity with LFP under favorable cost and policy conditions, enabling up to ~50% market share. The ICCT (2024) [45] also supports this possibility from a resource supply perspective. While mainstream forecasts suggest more modest shares, we retain this figure to explore the boundary conditions of future system transitions. The assumption is clearly labeled as a high-penetration technical scenario in Supplementary Table S4 and throughout the manuscript.

2.4.6. Scenario Where the Battery Lifespan Is Consistent with the Vehicle Lifespan

This paper assumes that the service life of BEVs and PHEVs is 12 years and 16 years, respectively, so the service life of ternary lithium batteries (NMC, NCA) in this scenario is consistent with the service life of new energy vehicles.

2.4.7. Scenario Where the Battery Lifespan Is Half of the Vehicle Lifespan

This paper assumes that the service life of BEVs and PHEVs is 12 and 16 years, respectively, which means that the service life of ternary lithium batteries (NMC, NCA) in this scenario is 6 and 8 years, respectively.

While electric vehicle batteries typically come with warranties of 8 to 10 years or 160,000 km, their actual degradation behavior in real-world urban conditions may diverge significantly from lab-tested expectations. For instance, Song et al. (2023) [46] demonstrated that lithium-ion batteries can reach end-of-life conditions—defined as 76% of initial capacity—within 5 to 7 years due to complex degradation behaviors including sudden capacity drops and regeneration. Guo et al. (2021) [47] further reviewed how temperature fluctuations, frequent fast charging, and deep cycling exacerbate battery aging in practical EV applications. Additionally, Sanguesa et al. (2021) [48] noted that urban shared mobility patterns and thermal stress may substantially shorten battery lifespan despite nominal warranties. Therefore, we adopt a 6-year battery lifespan scenario not as a central estimate, but as a conservative stress-test to evaluate the upper-bound of critical material retirement and recycling pressures under adverse operational environments.

2.5. Data Source

This study is built on a robust and transparent data foundation designed to support a comprehensive assessment of the environmental and material implications of Shanghai’s transition to electric mobility. The selection and application of each dataset reflect an integrated industrial ecology perspective, combining demographic, technological, and resource dimensions.

To trace the evolution of electric vehicle adoption, historical sales data for battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) from 2014 to 2022 were compiled from multiple authoritative sources, including the Shanghai Automobile Industry Association and major financial news platforms [34,35,49,50,51,52]. These figures form the basis for modeling fleet growth and evaluating cumulative material flows.

Due to the absence of disaggregated ownership data for the early years, stock estimates for BEVs and PHEVs between 2014 and 2020 were derived using a dynamic material flow approach—calculating active vehicle stock as the difference between cumulative sales and cumulative retirements. For 2021 and 2022, ownership figures are drawn directly from official reports. This methodology enables consistency over time and supports accurate modeling of in-use battery stocks.

Population dynamics are essential for estimating future vehicle demand. Shanghai’s population in 2022 is sourced from the [53], with projections through 2050 based on established demographic studies [54]. These data, provided in Supplementary Table S5, are used to calculate per capita vehicle ownership. Considering Shanghai’s stringent vehicle control policies and high urban density, by 2050, these data are consistent with prior research on megacity mobility constraints [54,55,56], who report city-level saturation bands of 250–350 vehicles per 1000 people for Shanghai under different scenarios.

Using these demographic and ownership projections, the shares of BEVs and PHEVs from 2023 to 2050 are modeled through a calibrated forecasting equation (Equation (4)), anchored in historical fleet data from the National Bureau of Statistics [57].

Battery capacities are another key input, influencing both material demand and lifecycle impacts. Based on the work of [37] and technical specifications from the Ministry of Industry and Information Technology, average battery capacities are assumed to increase from 40 kWh (BEVs) and 9 kWh (PHEVs) in 2021 to 102.7 kWh and 40.3 kWh, respectively, by 2050 (

Table 1. Power storage battery capacity for BEVs and PHEVs.

	BEVs *	PHEVs *
Battery Capacity (kWh/vehicle)	40	9

* Data sources refer to the research of Sakunai et al. [37].

).

Battery chemistries are standardized across scenarios to ensure comparability. BEVs are assumed to use lithium nickel cobalt aluminum oxide batteries (NCA), while PHEVs use lithium manganese oxide batteries (LMO)—following the modeling conventions of [17]. Critical metal content for these battery types is drawn from [29], with detailed data presented in

Table 2. Critical metals content in power storage batteries.

Critical Metal Types	Content (kg/kWh)
	Lithium Nickel Cobalt Aluminum Oxide Battery (NCA) *	Lithium Manganese Oxide Battery (LMO) *
Co	0.18	0.00
Li	0.10	0.14
Mn	0.00	2.57
Ni	0.95	0.00

* Data sources refer to the research of Sakunai et al. [37].

.

To assess potential resource constraints, global and domestic production data for cobalt, lithium, manganese, and nickel are sourced from the U.S. Geological Survey’s 2023 report. The 2022 production figures are used as a reference point for evaluating material availability under future demand scenarios (

Table 3. Global production of critical metals (cobalt, lithium, manganese, nickel) in 2022.

Region	Unit/(Ten Thousand t)
	Co *	Li *	Mn *	Ni *
Globe	19	13	2000	330
China	0.22	1.9	99	11

* The data are from the United States Geological Survey [58].

). To improve reproducibility and data transparency, this study clearly defines the production data used for major critical metals. The figures for China’s 2022 production of cobalt (2.2 thousand tons), lithium (1.9 thousand tons), and nickel (110 thousand tons) refer specifically to refined metal production rather than raw ore output. These values are sourced directly from the U.S. Geological Survey’s Mineral Commodity Summaries 2023 [58], which provides annual national-level production statistics for globally traded refined metals.

These figures serve as the domestic supply benchmark for comparing projected demand under different NEV development scenarios. Table 3 presents these values explicitly and cites the original U.S. Geological Survey document for reference.

To incorporate emerging battery technologies into the sustainability assessment, this study includes sodium-ion batteries (SIB), which are gaining attention for their lower critical metal dependence. Estimates of critical metal content in SIBs are based on reported consumption of sodium copper manganese ferrite, as detailed in the Sodium-Ion Battery Project III (see Supplementary Table S4). These datasets provide an interdisciplinary, evidence-based foundation for evaluating how shifts in battery technologies, vehicle adoption, and urban policy may influence long-term material sustainability in Shanghai—and offer transferable insights for other high-density cities pursuing low-carbon transitions.

To improve the scientific transparency of model assumptions, this study adopts parameter values based on recent empirical studies, official statistics, and authoritative technical sources. For example, battery capacities (40 kWh for BEVs and 9 kWh for PHEVs in 2021) are derived from Sakunai et al. (2021) [37], and projected growth to 102.7 kWh and 40.3 kWh by 2050 is based on data from the 72nd batch of the Catalog of New Energy Vehicle Models Exempt from Vehicle Purchase Tax, issued by MIIT in 2023. The assumed lifespans of BEVs and PHEVs (12 and 16 years, respectively) follow established modeling practices in Wang et al. (2022) and Anqi et al. (2022) [24,36], while service life variability is modeled using a normal distribution with a standard deviation equal to 30% of the mean [28].

The selection of sensitivity analysis parameters was guided by literature identifying key uncertainties in urban material flow models [25,27]. Specifically, battery capacity, vehicle lifespan, and vehicle saturation levels were chosen due to their proven impact on model outcomes. The variation range—such as increasing vehicle lifespan by ±10%—is also consistent with prior work in electric vehicle scenario modeling [22,40]. Together, these justifications ensure that model outputs remain robust under a range of plausible future conditions.

3. Results

To support a systems-level assessment of material sustainability in urban mobility transitions, this study examines the stock, demand, and end-of-life disposal of new energy passenger vehicles in Shanghai from 2014 to 2050 across seven scenario pathways. These include three adoption scenarios (baseline, intermediate, and intensified) and four battery-specific scenarios: a baseline battery configuration, a technology advancement pathway, a case where battery lifespan matches vehicle lifespan, and a more conservative case where battery life spans only half as long. Using these scenarios, the study estimates the flows of five critical metals—nickel, cobalt, lithium, manganese, and sodium—embedded in power batteries. It then evaluates the relationship between projected demand and current domestic production capacity, identifying potential supply risks under differing transition trajectories. These projections provide a foundation for assessing how shifts in vehicle technology and battery design may influence future material security. In addition to forecasting material flows, the study explores the potential for resource recovery through battery recycling. The analysis highlights the strategic importance of closing material loops, not only to mitigate raw material pressures but also to reduce environmental burdens and enhance economic resilience. By integrating forward-looking demand scenarios with recovery and reuse potential, this study offers actionable insights into how critical metal management can support a more circular, equitable, and sustainable transition to electric mobility in high-density urban contexts.

3.1. Research Findings

3.1.1. Renewable Energy Passenger Vehicle Ownership, Demand, and Scrappage Volume

As illustrated in Supplementary Figure S1a, battery electric vehicle (BEV) ownership in Shanghai is projected to follow a pronounced S-shaped growth across all scenarios, reflecting the city’s transition toward sustainable transportation. Between 2014 and 2040, BEV stock expands rapidly, supported by policy incentives and technological advancements. Although population decline after 2040 moderates growth, BEV numbers are expected to reach between 3.9 and 7.8 million by 2050, with the intermediate scenario projecting approximately 6.2 million vehicles. This corresponds to an annual growth rate near 27%, signaling a decisive shift away from fossil-fuel vehicles. Plug-in hybrid electric vehicles (PHEVs), however, show a contrasting trajectory characterized by an inverted U-shape (Supplementary Figure S1a). Ownership peaks between 2025 and 2028 at under 0.2 million vehicles before declining steadily to near zero by mid-century. This decline reflects the accelerating preference for fully electric mobility solutions, which offer greater environmental benefits. Demand patterns closely follow ownership trends [27]. Supplementary Figure S1b indicates that BEV demand accelerates sharply, peaking around 2043 with an estimated annual demand of 0.33 to 0.68 million vehicles before stabilizing at a significant volume through 2050. Conversely, PHEV demand displays a short-lived M-shaped curve, diminishing entirely by the early 2040s, consistent with the phase-out of this technology. Vehicle scrappage trends further emphasize this transition. As shown in Supplementary Figure S1c, BEV retirements steadily increase, surpassing demand by 2050 with 0.29 to 0.59 million vehicles scrapped annually. PHEV scrappage peaks near 2035 and then declines sharply, reflecting the diminishing role of hybrids in Shanghai’s evolving transport system. These findings underscore the pivotal role of BEVs in advancing Shanghai’s low-carbon mobility goals. The rapid expansion of BEV ownership and turnover will drive substantial demand for critical metals and materials, presenting both challenges and opportunities for sustainable resource management. Strategic planning is essential to ensure that material supply chains align with environmental objectives and support the city’s transition to a resilient, sustainable transportation future. This pattern is consistent with recent city-scale estimates of China’s end-of-life passenger vehicle flows [55].

3.1.2. Stock, Demand, and Scrappage of Critical Metals in Power Batteries of New Energy Passenger Vehicles

Figure 3 illustrates the rapid increase in critical metals contained within batteries used in new energy passenger vehicles, reflecting the growing adoption of sustainable transportation. From an initial total of just 42.7 tons in 2014, the stock of these metals is expected to grow significantly, reaching between 0.19 and 0.70 million tons by 2050. An intermediate estimate places this figure at approximately 0.30 million tons, marking an increase of up to 16,500-fold. This expansion emphasizes the substantial resource requirements linked to transitioning toward sustainable mobility. Nickel, cobalt, and lithium will dominate this increase in critical metal demand. By 2050, nickel stocks are projected to range from 0.15 to 0.30 million tons, cobalt from 0.03 to 0.06 million tons, and lithium between 0.02 and 0.35 million tons, under intermediate scenarios. Such substantial growth underscores the necessity of adopting responsible resource management strategies. Enhancing recycling technologies and ensuring sustainable supply chains are critical to minimizing environmental impacts and reducing reliance on finite resources. The accelerated demand for critical metals presents both challenges and opportunities. Addressing this demand effectively requires integrated strategies involving policy, industry, and research collaboration. A coordinated approach can ensure that the expansion of electric vehicle technology aligns with broader sustainability objectives, incorporating circular economy principles and minimizing ecological impacts throughout battery lifecycles.

Lithium’s role in EV battery production is becoming increasingly critical, not only for energy density but also for meeting range and performance expectations. The IEA (2024) [59] reports that lithium demand for EV batteries reached approximately 140 kt in 2023—about 85% of total lithium consumption—growing more than 30% from the previous year. Long-term projections indicate that demand could increase more than fifty-fold by 2040, exceeding 10 Mt annually under high-electrification scenarios [60]. Xu et al. (2020) [61] estimate EV battery lithium demand in 2050 at 0.6–1.5 Mt, highlighting strong sensitivity to battery capacity assumptions. Such findings align with our scenario results, where cumulative lithium stocks in Shanghai’s NEV batteries grow from 0.02 Mt in 2014 to up to 0.35 Mt by 2050, underscoring the urgency of securing sustainable lithium supply chains and recycling pathways.

Figure 4 compares the critical metal requirements of various battery chemistries projected for 2050, under two scenarios: basic battery technology and advanced battery innovations. Under the basic battery scenario, ternary batteries are expected to contain about 0.05 million tons of critical metals, significantly more than lithium iron phosphate batteries, projected at approximately 0.01 million tons. This difference highlights how the choice of battery chemistry substantially influences resource demand and environmental outcomes.

Figure 5 shows the potential reductions in critical metal usage achievable through advancements in battery technology by 2050. The trend presented in this figure is consistent with the results of external studies, including the research by the [59] on the recent growth in lithium demand, the study by [60] on the potential growth of demand by 50 times by 2040, and the research by [61] on the range of demand in 2050. Stocks of critical metals in ternary lithium batteries (NMC/NCA), lithium iron phosphate batteries (LFP), and sodium-ion batteries (SIB) could decrease substantially, approaching near-zero or even negative levels. These anticipated improvements demonstrate the significant impact that enhanced material efficiency, better recycling methods, and alternative battery chemistries could have in promoting sustainable resource management.

Supplementary Figure S2 illustrates the annual and cumulative demand for critical metals used in batteries for new energy passenger vehicles in Shanghai from 2014 to 2050 under different vehicle ownership scenarios. The intensified scenario projects notably higher demand for nickel, cobalt, and lithium compared to the intermediate and baseline scenarios. This is largely due to the greater proportion of battery electric vehicles (BEVs) anticipated in the intensified scenario, where nickel cobalt aluminum batteries (NCA), which rely heavily on these metals, dominate. Table 3 presents China’s 2022 domestic production capacity for key metals—nickel, cobalt, lithium, and manganese—which refers to refined metal production data as reported by U.S. Geological Survey (2023) [58]. The adequacy of these supplies varies depending on future scenarios and specific metals. Firstly, domestic nickel production capacity appears sufficient to meet future demand in Shanghai for BEV batteries across all scenarios. Nickel demand is anticipated to peak around 2043, ranging between approximately 13 to 26 thousand tons, with an intermediate estimate of around 20 thousand tons. Cumulative nickel demand from 2014 to 2050 is projected to be between 0.26 and 0.52 million tons, representing 2.4 to 4.7 times China’s current production capacity. Secondly, current cobalt production capacity is limited. It can meet short- to medium-term demand (2023–2029) under the baseline scenario but will fall short thereafter, especially under the intermediate and intensified scenarios. Cobalt demand is projected to exceed domestic production capacity by 2032 in the intermediate scenario and by 2030 in the intensified scenario. Demand peaks around 2043 at approximately 3858 tons (intermediate) and 4897 tons (intensified), roughly 1.8 and 2.2 times the current capacity, respectively. Cumulatively, from 2014 to 2050, cobalt demand ranges from 50 to 98 thousand tons (78 thousand tons intermediate scenario), significantly exceeding the current production capacity by 22.7 to 44.5 times (35.5 times intermediate scenario). Thirdly, lithium production capacity currently available in China is adequate to meet projected demands in Shanghai. Lithium demand peaks around 2043, with estimates ranging from 1000 to 3000 tons annually (approximately 2000 tons in the intermediate scenario). Cumulative lithium demand from 2014 to 2050 will reach 28 to 55 thousand tons, approximately 1.5 to 2.9 times current production capacity. Lastly, China’s domestic manganese production capacity can sufficiently cover future demands for plug-in hybrid electric vehicles (PHEVs) in Shanghai. Overall, the scenario analysis for Shanghai highlights varying degrees of pressure on China’s critical metal resources during its transition to low-carbon mobility, with cobalt facing particularly significant supply–demand challenges.

Supplementary Figures S3 and S4 illustrate the projected demand for critical metals in various battery technologies from 2014 to 2050, under baseline and advanced battery technology scenarios. For ternary lithium batteries (NMC/NCA), the demand peaks around 2043 and 2045, reaching approximately 4000 tons in the baseline scenario and 6000 tons in the intensified scenario. Similarly, lithium iron phosphate batteries (LFP) see peak demands of approximately 800 tons and 1000 tons around the same years. Sodium-ion batteries (SIB) reach their peak demand of about 18 thousand tons around 2045. The comparison highlights greater demand under the advanced battery scenario due to the inclusion of more diverse battery technologies, variations in market share, and differences in battery capacities across vehicle types.

Supplementary Figures S5 and S6 depict scenarios where battery lifespan aligns either fully or partially (half) with vehicle lifespan. Under these conditions, critical metal demand peaks in 2043 and 2050, at approximately 0.03 million tons and 0.1 million tons, respectively. Cumulative demand from 2014 to 2050 ranges significantly across metals: lithium demand varies from approximately 3 to 10 thousand tons; nickel from around 4 to 10 thousand tons; cobalt from about 4 to 9 thousand tons; and manganese from roughly 2 to 9 thousand tons.

Supplementary Figure S7 outlines the annual and cumulative volumes of critical metals decommissioned from new energy vehicle batteries in Shanghai from 2014 to 2050. Reflecting trends in vehicle decommissioning, these volumes steadily increase, surpassing the demand by 2050. Total decommissioned metals by then are projected to range from 15 to 29 thousand tons, with an intermediate scenario estimating 23 thousand tons. Specifically, nickel decommissioning volumes are forecasted to reach 11 thousand tons (baseline scenario), 18 thousand tons (intermediate scenario), and 22 thousand tons (intensified scenario). Cumulative nickel decommissioning from 2014 to 2050 could range between 0.12 and 0.23 million tons, which is roughly 1.1 to 2.1 times current domestic production capacity.

Cobalt, notably constrained by domestic capacity, is expected to face supply-demand pressures earlier, with decommissioning volumes surpassing current production capacities by 2043 and 2041 under intermediate and intensified scenarios, respectively. By 2050, cobalt decommissioning volumes reach 3.37 thousand tons (intermediate) and 4.27 thousand tons (intensified), representing 1.5 to 1.9 times current domestic capacity. Cumulatively, cobalt volumes are projected to range from 23 to 43 thousand tons, approximately 10.5 to 19.5 times the current production capacity. For lithium, decommissioning volumes by 2050 are expected to exceed demand across all scenarios, reaching between approximately 1182.1 and 2384.5 tons. The cumulative lithium decommissioning volume from 2014 to 2050 ranges between 13 and 24 thousand tons, roughly matching or slightly exceeding current domestic capacity. Manganese decommissioning is projected to peak around 2035, ranging from about 406 to 440 tons, declining thereafter to approximately 54 to 218 tons by 2050. Cumulative manganese decommissioning volumes from 2014 to 2050 are estimated between 5950 and 7808 tons.

Supplementary Figures S8 and S9 compare critical metal decommissioning under baseline and advanced battery technology scenarios. By 2050, ternary lithium batteries (NMC/NCA) will see decommissioning volumes of approximately 4000 tons (baseline) and 5000 tons (intensified scenario), while lithium iron phosphate batteries (LFP) reach 800 and 1000 tons, respectively. Sodium-ion batteries (SIB) are projected to have a notably higher decommissioning volume of around 17 thousand tons.

Supplementary Figures S10 and S11 illustrate critical metal decommissioning volumes based on battery lifespan scenarios: matching vehicle lifespan versus half of vehicle lifespan. By 2050, these scenarios result in decommissioning volumes of approximately 3 tons and 10 thousand tons, respectively.

It is evident that the substantial accumulation of critical metals such as nickel, cobalt, lithium, and manganese in decommissioned vehicle batteries presents significant opportunities for resource recovery. Effective recycling of these materials could substantially reduce dependence on new raw material extraction, promoting sustainable resource management.

3.2. Sensitivity Analysis

To assess how different assumptions impact the estimated volumes of critical metals decommissioned from new energy vehicle batteries, this study includes three sensitivity analyses. First, based on the 72nd batch of the “New Energy Vehicle Model Catalogue Exempted from Vehicle Purchase Tax,” issued by China’s Ministry of Industry and Information Technology on 12 December 2023 [62], the average battery capacities were adjusted to reflect real-world values: battery electric vehicles (BEVs) increased from 40 kWh to 59.5 kWh, and plug-in hybrid electric vehicles (PHEVs) increased from 9 kWh to 28.6 kWh. Second, the analysis considered an increase in the average service life of BEVs and PHEVs by 10% [16]. Third, vehicle saturation levels in Shanghai were projected to rise from 376 vehicles per 1000 people to 600 vehicles per 1000 people by 2050 [27]. Detailed results of these sensitivity analyses are provided in Supplementary Materials. The sensitivity analyses reveal that increasing battery capacities and higher future vehicle saturation significantly elevate the quantities of critical metals being decommissioned, particularly under intensified scenarios. Conversely, extending the service life of new energy vehicles notably reduces the volume of critical metals requiring decommissioning, highlighting an important consideration for sustainable resource management strategies. The choice of vehicle saturation and lifetime distributions is a first-order driver of retirement volumes at the city level, as also shown by [55].

4. Discussion

4.1. Strategic Benefits of Recycling Critical Metals from Discarded New Energy Passenger Vehicle Power Batteries

China heavily relies on imports for critical metals such as lithium, cobalt, nickel, and manganese, with external dependency exceeding 50% overall, and reaching over 90% for cobalt and nickel specifically. Furthermore, these imports come from limited sources, exacerbating supply risks due to geopolitical uncertainties [63]. Developed countries increasingly prioritize securing critical metal supply chains, viewing China as their primary competitor, and aim to reduce dependency through international alliances. Initiatives such as the European Union’s European Critical Raw Materials Act aim to minimize reliance on China for essential metals like lithium and rare earth elements, thereby enhancing their supply security for low-carbon energy transitions and defense purposes [4,49,64]. Taking cobalt as a case study, this research indicates that China’s existing cobalt production capacity will be insufficient to meet Shanghai’s medium- to long-term demand for battery electric vehicles (BEVs) after 2029 under intensified scenarios. The cumulative volume of cobalt decommissioned from vehicle batteries could reach between 23 and 43 thousand tons, representing 10.5 to 19.5 times current domestic production capacity. This significant mismatch underscores critical supply–demand challenges for cobalt in China, highlighting potential risks to national resource security. Efficient recycling and utilization of critical metals from scrapped new energy vehicle batteries can substantially mitigate these supply risks and reduce dependence on primary mineral extraction. Moreover, expanding these recycling efforts to include other renewable energy technologies such as wind power and photovoltaics could further enhance resource sustainability. Recognizing such potential, South Korea recently introduced the Enhanced Battery Recycling Industry Competitiveness Plan, investing approximately $29 billion over the next five years to strengthen upstream mineral supply and battery recycling capabilities, thereby bolstering its battery industry competitiveness [65].

Given the pivotal role of critical metals in low-carbon energy transitions and national security, ensuring their secure and sustainable supply is a strategic imperative for nations globally. Recycling metals from decommissioned new energy vehicle batteries is essential to achieving resource security, energy stability, and national defense objectives.

Although manganese decommissioning reaches its peak around 2035, the potential of Mn recovery to partially substitute cobalt in future cathode chemistries remains limited. While Ni–Mn–Co oxide (NMC) systems already combine Mn with Ni and Co, recent advances in cobalt-free cathodes—such as nickel manganese aluminum oxide (NMA) and manganese-rich disordered rock salt (DRX) materials—suggest progressive reductions in Co dependency [66,67]. However, manganese alone cannot fully replace cobalt due to its lower energy density and structural limitations [68]. Thus, recovered Mn may serve as a supplementary resource to reduce cobalt use, rather than a substitute. Further techno-economic analysis is needed to assess whether large-scale Mn recycling can reduce future dependency on cobalt under realistic battery adoption scenarios.

4.2. Environmental Benefits of Recycling Critical Metals from Discarded New Energy Passenger Vehicle Power Batteries

The growing demand for new energy passenger vehicles, coupled with their limited lifespan, has significantly increased the volume of decommissioned power batteries. These batteries contain substantial amounts of heavy metals and hazardous substances, presenting serious environmental risks. If not properly recycled, discarded batteries can lead to soil contamination and water pollution, harming natural ecosystems, biodiversity, and human health [64,69]. Effective recycling of these batteries upon reaching their end-of-life is therefore critical, as it prevents secondary pollution and reduces the substantial costs associated with environmental remediation [64,70].

Vehicle electrification is a vital strategy for achieving carbon neutrality in transportation. Studies indicate that the electrification of vehicles in Shanghai has contributed positively to public health and climate change mitigation [71]. However, other research highlights that although electric vehicles emit less carbon during operation than conventional vehicles, the production of their batteries—particularly the mining and refining processes for critical metals like nickel, cobalt, and lithium—accounts for approximately 70% of their total lifecycle emissions. This significantly offsets the potential environmental benefits [1,72]. Efficient recycling of critical metals from batteries in retired new energy vehicles can substantially reduce their lifecycle greenhouse gas emissions. For example, lifecycle emissions for lithium recovered from recycled batteries are approximately 37% (4.58 kgCO₂e/kg LiOH) and 72% (20.06 kgCO₂e/kg LiOH) lower than lithium sourced from Chilean brine or Australian ore, respectively [73,74]. Assuming closed-loop recycling of the 13 to 24 thousand tons of lithium from decommissioned vehicle batteries in Shanghai between 2014 and 2050, lifecycle emissions could decrease by at least 59.5 to 109 thousand tons. Furthermore, producing high-nickel ternary lithium batteries (NCM811) with recycled critical metals reduces lifecycle greenhouse gas emissions by 40% to 48% compared to using newly extracted materials [74]. The recovery and reuse of critical metals from retired new energy vehicle batteries is essential for the transportation sector to meet its carbon neutrality objectives. Nevertheless, the recycling process itself—especially hydrometallurgical methods—may generate wastewater, acid emissions, and secondary pollutants if not properly managed [75]. In addition to reducing reliance on critical metals such as lithium, cobalt, and nickel, sodium-ion batteries (SIBs) introduce new resource considerations, particularly increased sodium and copper usage. While sodium is abundant and widely available, copper production can entail high water and energy consumption, as well as associated greenhouse gas emissions. According to life cycle assessment studies [3,71], producing 1 ton of refined copper requires approximately 50–200 m³ of water and 20–50 GJ of energy, resulting in 3–5 t CO₂e of emissions, depending on ore grade and technology. Therefore, the net environmental benefit of SIB adoption depends on the balance between reduced critical metal demand and the added environmental footprint of sodium and copper production. Integrating such trade-off analysis into long-term material planning is essential to ensure that technology transitions align with broader sustainability objectives.

4.3. Economic Benefits of Recycling Critical Metals from Discarded New Energy Passenger Vehicle Power Batteries

The recycling of critical metals from retired power batteries of new energy passenger vehicles represents an essential component of the circular economy, with its sustainability closely tied to market scale and profitability [76]. In terms of market scale, Swain (2017) [77] forecasts that the global lithium battery market will expand significantly from $41.1 billion in 2021 to approximately $116.6 billion by 2030, reflecting an annual growth rate of around 12.3%. Industry projections also suggest that China’s new energy vehicle (NEV) battery recycling market will grow substantially, reaching RMB 140.6 billion by 2030, nearly nine times the market size recorded in 2022 [78]. From 2014 to 2050, the cumulative volume of decommissioned nickel, cobalt, and lithium from power batteries in Shanghai’s new energy passenger vehicles is expected to reach approximately 227 thousand tons, 43 thousand tons, and 24 thousand tons, respectively. Given market prices as of 29 December 2023—nickel at RMB 131,600 per ton, cobalt at RMB 235,300 per ton, and lithium at RMB 914,450 per ton—the potential market value of these recovered metals could amount to approximately RMB 61.94 billion [79]. However, these estimates are based on static 2023 prices. In contrast, the average spot price of battery-grade lithium carbonate dropped to RMB 75,050/ton in 2024, reflecting a 22.6% year-on-year decline [80]. Profitability also supports the sustainability of recycling critical metals. Studies highlight that the concentration of these metals in retired NEV batteries significantly exceeds that found in primary mineral resources [75]. Fan et al. (2020) [81] developed a profitability model for lithium-ion battery recycling, demonstrating that profits equal revenues from recycled products minus total costs, including transportation, equipment depreciation, energy consumption, equipment maintenance, water usage, labor, and chemical reagents. Yang et al. (2018) [82] applied this model and estimated a profit of USD 196.03 from recycling 330 kg of lithium iron phosphate battery (LFP) materials. Additionally, Hao et al. (2021) [83], through a cost-revenue analysis, concluded that recycling 10 thousand tons of retired power batteries could yield profits ranging from RMB 3.41 million to RMB 4.01 million annually when led by automakers or industry alliances, respectively.

In summary, assessing both market potential and profitability clearly indicates that recycling critical metals from end-of-life new energy vehicle batteries offers substantial economic advantages, reinforcing its critical role in sustainable resource management.

5. Conclusions and Implications

This study employs a dynamic material flow analysis to estimate the demand and decommissioning volumes of critical metals in power batteries used by new energy passenger vehicles in Shanghai from 2014 to 2050. It further evaluates the strategic, environmental, and economic benefits associated with recycling these critical metals. Key conclusions and implications are as follows:

Firstly, the annual peak demand for critical metals in Shanghai’s new energy vehicle batteries will reach approximately 0.03 to 3.4 thousand tons, with cumulative demand increasing substantially over the studied period. Between 2014 and 2050, the cumulative demand is projected to reach 10 to 518 thousand tons for nickel, 40 to 98 thousand tons for cobalt, and 10 to 55 thousand tons for lithium. This represents 0.01 to 4.7 times, 1.8 to 44.5 times, and 0.05 to 2.9 times China’s current domestic production capacities, respectively. Particularly under intensified adoption scenarios, domestic cobalt production capacity is insufficient to meet Shanghai’s long-term needs beyond 2029. These findings are directly derived from the scenario-based results presented in Section 3.1 and Section 3.2, ensuring that the conclusions are firmly grounded in the quantitative evidence generated by the dynamic material flow model. The projected peaks, cumulative volumes, and supply–demand gaps provide clear, evidence-based support for the urgency of scaling up recycling capacity.

Secondly, the volume of critical metals available from retired vehicle batteries will rise significantly, eventually surpassing the primary mineral resource demand by 2050. From 2014 to 2050, the cumulative volumes of scrapped metals are expected to range from 0.07 to 227 thousand tons for nickel, 0.2 to 43 thousand tons for cobalt, and 0.06 to 24 thousand tons for lithium. These volumes correspond to approximately 0.01 to 2.1 times, 0.9 to 19.5 times, and 0.03 to 1.3 times current domestic production capacities, respectively.

Lastly, recycling critical metals from end-of-life vehicle batteries presents multiple benefits. It significantly reduces dependency on primary mineral extraction, enhances national resource security, mitigates secondary environmental pollution, and substantially decreases lifecycle greenhouse gas emissions from new energy vehicles. Additionally, recycling activities demonstrate sustainable market potential and profitability.

To effectively support the development and recycling of critical metals from retired power batteries, the following policy recommendations are proposed:

First, the Shanghai municipal government should establish dedicated funds to build robust battery recycling infrastructure and provide financial incentives to certified recycling enterprises. Concurrently, clear industry development plans and guidelines should be formulated to standardize recycling practices.

Second, recycling enterprises in Shanghai should invest more in innovative recycling technologies to enhance recovery rates of critical metals. Manufacturers should also prioritize eco-design principles in battery production, focusing on extending battery life and ensuring batteries are easier to repair, disassemble, recycle, and reuse.

Third, the national government should refine policies and regulatory frameworks to encourage active participation in battery recycling. A collaborative, multi-stakeholder extended producer responsibility system involving government oversight, industry operation, and consumer participation should be established to balance responsibilities and benefits among all stakeholders.

The findings of this study provide critical data support for sustainable energy transitions and resource security at a megacity scale, serving as an evidence-based foundation for policy formulation. Beyond the Shanghai case, the modeling framework and parameter calibration approach are adaptable to other megacities, resource-based cities, and small-to-medium-sized cities, provided that local demographic, technological, and policy variables are recalibrated. Applying this model in diverse urban contexts would allow comparative assessments of critical metal demand and recycling potential under different socio-economic and policy conditions. Furthermore, battery recycling can generate substantial benefits for other countries by reducing dependence on imported critical metals, lowering lifecycle emissions, and creating local green jobs, particularly where domestic mining capacity is limited.

This study also has limitations. It does not quantify the full economic feasibility of recycling critical metals under varying market price scenarios, nor does it capture potential changes in material flows from disruptive battery technologies beyond those modeled. The timing of recycling-based resource substitution effects also has inherent delays. Moreover, future research should integrate spatially explicit life cycle assessment, cross-city comparative analysis, and policy scenario testing, and explore deep-sea mining, as substantial reserves of critical metals discovered in seabed deposits may significantly influence future supply dynamics.