The EV Battery Supply Chain Explained

The document outlines the EV battery supply chain—divided into upstream (mining), midstream (processing/refining), downstream (assembly), and end-of-life—highlighting China's current dominance. It discusses the environmental and human rights risks associated with mining critical minerals like lithium and cobalt, and details US legislative tools such as the Inflation Reduction Act designed to 'de-risk' the supply chain and foster domestic economic growth.

• The US transportation sector is the largest emitter of greenhouse gases in the US economy, with light-duty vehicles accounting for approximately half of those emissions. To limit global temperature increases to 1.5°C, the US would need to replace over 300 million internal combustion engine vehicles with EVs, increasing the number of EVs on US roads from 2.5 million today to 44 million by 2030 to reach net-zero emissions.
• The EV battery supply chain is categorized into four stages: Upstream (extraction of raw materials like lithium, cobalt, manganese, nickel, and graphite), Midstream (purification, refining, and creation of cathode/anode materials and 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% of all battery cell manufacturing capacity, 90% of anode and electrolyte production, and 60% 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 working in mines and quarries—and environmental damage such as tailings dam failures and water depletion. Producing one ton of lithium requires more than 2 million liters of water.
• The US government is utilizing several legislative tools to strengthen domestic supply chains and reduce reliance on China. The Inflation Reduction Act (IRA) provides tax credits for consumers and manufacturers, requiring critical minerals to be extracted or processed in the US or a Free Trade Agreement (FTA) country. Other key laws include the Infrastructure Investment and Jobs Act and the CHIPS and Science Act.
• While the US currently accounts for only 7% of global battery production capacity (72 GWh), this is projected to grow to over 1,000 GWh within two years due to new facilities and investments. US-based companies including Ford, General Motors, Tesla, and Stellantis have announced investments exceeding $173 billion in the EV transition.

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} }