From Demand to Circularity: Rethinking National Strategy on Automobile Battery Supply Chain for Sustainability

The rapid electrification of transport is driving soaring demand for lithium-ion batteries (LIBs), straining critical mineral supply chains. While policy efforts increasingly emphasize circularity, the diverse and uncertain impacts of supply chain interventions remain poorly understood. We develop a globally applicable scenario-based dynamic material flow simulator incorporating eight drivers with 20 policy options to assess their individual and combined effects on resource conservation and circularity in automotive LIBs. Using the world’s largest car exporter, Japan, as a case, we show that even late EV adopters can rapidly close critical mineral loops through intensive policy measures, though results depend strongly on policy combinations. Supplier-side policies can at best reduce mineral demand, while user-side actions more strongly boost circularity. Accelerated recycling of end-of-life LIBs is most influential, followed by advanced battery design. Cross-border traceability, mandatory collection, recycling infrastructure, carbon-neutral fuels, and compact urban design moderately reduce demand but contribute less to circularity. Extending battery life presents trade-offs while restricting the export of used vehicles has a limited effect. We reveal strong synergies among coordinated policies and trade-offs between short-term resource efficiency and long-term circularity. Our results stress the need for integrated, stage-specific strategies that align resource security with circular economy goals. Openly accessible online, the simulator enables nations to craft tailored policies and support international negotiation.