JM CEO Robert MacLeod, who announced his resignation the same day, said the company had concluded the potential returns did not justify further investment.

The British chemicals firm had been working to commercialise its range of high nickel cathode materials, principally for the EV sector, and had showcased a race car using its eLNO battery cathode technology for improved driving range and faster recharging at COP26 in Glasgow.

While demand for battery materials was accelerating, so was competition from alternative technologies and other manufacturers, the company said.

"Consequently this is rapidly turning into a high volume, commoditised market," it said.

It had become clear its capital intensity was too high compared with other more established large-scale, low-cost producers and its board decided "to pursue the sale of all or parts of this business with the ultimate intention of exiting".

Benchmark's chief data officer Caspar Rawles said JM's decision highlighted the increasingly competitive nature of the lithium ion supply chain and growing capex pressures to meet scale requirements.

JM was building a factory in Poland to produce 10,000 tonnes per year of its nickel-rich cathode material, adding in April it would build a 30,000tpa plant in Finland and announced supply and processing deals. 

At 40,000tpa, Johnson Matthey's forecast European capacity in 2024 would equate to 15% of the continent's Europe's electric vehicle battery demand, according to data from Benchmark's Cathode Market Assessment.

JM also last week flagged its full-year trading outlook for the year to March 31 was towards the lower end of market expectations, due to supply chain and labour shortages.

It said Liam Condon, currently the head of Bayer's crop science division, would replace MacLeod as CEO on March 1.