The EV Battery Supply Chain Explained

This guide by RMI provides a comprehensive overview of the electric vehicle (EV) battery supply chain, detailing the four stages of production: upstream (mining), midstream (processing and cell manufacturing), downstream (assembly), and end-of-life. It examines the current global dominance of China, the risks associated with supply chain concentration, and the human rights and environmental challenges inherent in mineral extraction. The document also analyzes US legislative efforts, such as the Inflation Reduction Act, aimed at diversifying the supply chain, increasing domestic production, and ensuring ethical sourcing.

• To achieve net-zero emissions, the number of electric vehicles on US roads must increase from approximately 2.5 million to 44 million by 2030. S&P Global Mobility predicts that EV sales in the US could reach 40 percent of total passenger car sales by 2030, with some projections exceeding 50 percent.
• The EV battery supply chain is divided into four categories: Upstream (extraction of lithium, cobalt, manganese, nickel, and graphite), Midstream (purification and creation of cathode/anode materials and battery cells), Downstream (assembly of cells into modules and packs for automakers), and End of Life (reuse or recycling).
• China currently dominates the global EV battery supply chain, producing 75 percent of all battery cell manufacturing capacity, 90 percent of anode and electrolyte production, and 60 percent of battery component manufacturing. It also processes and refines more than half of the world's cobalt, lithium, and graphite.
• Upstream mining is linked to severe human rights and environmental issues, including the use of child and forced labor—with the International Labor Organization reporting over 1 million children in mines and quarries—and environmental damage such as tailings dam failures. Since 1915, over 250 tailings dam failures have killed 2,650 people.
• The US is attempting to strengthen its domestic supply chain through legislation. The Inflation Reduction Act (IRA) provides various credits and grants, including a $30.62 billion Advanced Manufacturing Production Tax Credit and a Clean Vehicle Tax Credit of up to $7,500 for consumers. The IRA requires critical minerals to be extracted or processed in the US or a Free Trade Agreement (FTA) country to qualify for certain credits.
• The US downstream sector is expanding rapidly; current battery manufacturing capacity of 72 GWh could grow to over 1,000 GWh within two years. US-based companies, including Ford, General Motors, Tesla, and Stellantis, have announced investments exceeding $173 billion in the transition to EVs.
• To improve transparency and ethical sourcing, stakeholders are pursuing 'battery passports' to track minerals from extraction to vehicle. Additionally, the Initiative for Responsible Mining Assurance (IRMA) provides third-party verification for industrial-scale mines, and companies like Ford require suppliers to be committed to or certified by IRMA.

APA

RMI (2023). The EV Battery Supply Chain Explained. https://rmi.org/resources/the-ev-battery-supply-chain-explained/

Chicago

RMI. The EV Battery Supply Chain Explained. 2023. https://rmi.org/resources/the-ev-battery-supply-chain-explained/.

Wikipedia

{{cite report |author=RMI |title=The EV Battery Supply Chain Explained |date=5 May 2023 |url=https://rmi.org/resources/the-ev-battery-supply-chain-explained/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2023battery, author = {{RMI}}, title = {{The EV Battery Supply Chain Explained}}, institution = {RMI}, year = {2023}, month = may, url = {https://rmi.org/resources/the-ev-battery-supply-chain-explained/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }