A Country-Level Study of Exposure to Battery Price Fluctuations through Trade Networks

Andrea Bastianin, Ilenia Gaia Romani, Luca Rossini, and Marco Zoso

September 2025 (revised January 2026)

This study examines the impact of critical raw materials (CRMs) and their processed derivatives on countries’ exposure to lithium-ion battery price fluctuations. Specifically, we investigate how a country’s position within the global trade network of CRMs and batteries influences the volatility of its terms-of-trade (TOT) for batteries. To this end, we construct a new country-level TOT price index for batteries and a series of network indicators by supply chain level, for 150 countries, and over 21 years. Using a panel regression framework, we estimate the effects of these indicators on price volatility. To address endogeneity between trade structure and price volatility, we adopt a Shift Share Instrumental Variable (SSIV) approach.

Our results show that the relationship between trade networks and price volatility depends on both the supply-chain stage and the direction of trade. Import diversification significantly reduces countries’ vulnerability to battery price shocks. Beyond local connectivity, global network position plays an independent role: countries more centrally embedded in trade networks are better able to absorb shocks and mitigate price volatility.

JEL Codes: E3, F14, Q37, Q02, Q4.

Keywords: Critical Raw Materials, Battery Price, Exposure, Trade Networks.