Multi-criteria analysis of regional collaboration for lithium-ion battery and electric vehicle production in Paraguay

Abstract

Lithium-ion batteries are essential for electric vehicles, requiring critical resources such as lithium and cobalt. Paraguay’s integration into the electric vehicle supply chain presents an opportunity to leverage its renewable energy and strategic location. This study evaluates potential partners for Paraguay to establish a lithium-ion battery and electric vehicle assembly plant in the Chaco region. A multi-criteria decision analysis using the Analytic Hierarchy Process and expert opinions assessed Argentina, Brazil, Bolivia, and Chile based on economic, energy, environmental, social, political, and geopolitical factors. The results indicate Chile as the most favorable partner (29.5%), followed by Argentina (25.9%), Bolivia (22.8%), and Brazil (21.6%). Chile’s strengths lie in its environmental policies and political stability, while Argentina offers logistical advantages and resource availability. The findings highlight strategic pathways for Paraguay’s integration into the electric vehicle supply chain and the importance of targeted collaboration to enhance regional lithium-ion battery production and commercialization.