The electric vehicle (EV) battery supply chain is vast and complex, spanning mining and processing to assembly and end-of-life management. This article reviews the supply chain’s four primary stages: upstream, midstream, downstream, and recycling or repurposing. It also highlights major supply chain challenges and explores potential solutions to improve resiliency, efficiency, and sustainability.
Figure 1. A detailed illustration of the EV battery supply chain, highlighting upstream, midstream, downstream, and end of life. (Image: RMI)
Defining the EV battery supply chain
Each part of the supply chain (Figure 1) is crucial to ensure the production of safe, reliable, and efficient EV Lithium-ion (Li-ion) battery traction packs for automotive companies worldwide.
The four key stages include:
- Upstream: Mining operations extract raw materials such as lithium, cobalt, manganese, nickel, and graphite. These essential elements lay the foundation for manufacturing Li-ion traction battery packs, encompassing battery cells, anodes, cathodes, and electrolytes.
- Midstream: After extraction, transporters move the raw materials to processing facilities, where specialists meticulously refine them into cathode and anode active materials and electrolytes that facilitate ion transport during charge and discharge cycles.
- Downstream: Technicians assemble battery cells into modules — strategically arranging them within a metal frame to protect against vibration and environmental hazards. These modules are then incorporated into battery packs alongside battery management systems (BMS), thermal management systems, electrical interconnects, and protective casing, forming a complete battery system.
- End of life: Recycling and repurposing specialists handle EV batteries at the end of their operational lifecycle. Reused batteries, for example, can function as energy storage or backup units, while recycling facilitates the recovery of valuable metals such as lithium, cobalt, and nickel.
Understanding supply chain challenges
China plays a crucial role in the EV battery supply chain, maintaining significant control over-extraction, refinement, and production. Supply chain resiliency and diversity are further limited by the geographical concentration of mines and (known) raw materials used to manufacture Li-ion batteries.
For example, Australia (Figure 2) and Chile mine 70% of global lithium, while China refines 60% of all mined lithium. Similarly, Indonesia boasts the largest share of mined nickel, while the Democratic Republic of Congo extracts 75% of cobalt.
Figure 2. The Greenbushes Mine in Western Australia. (Image: Manufacturers’ Monthly)
Perhaps most concerningly, the EV battery supply chain spans multiple continents, averaging 50,000 miles from extraction to cell production. The vast distances between critical mining, refinement, and production points introduce serious disruption risks — from extreme weather and geopolitical conflicts to logistical challenges and regulatory hurdles.
Expanding North American mining, refinement, and production capacities can help mitigate these risks by increasing the availability of raw and processed materials assembled and distributed through shorter and more efficient supply chains.
Boosting extraction and mining in North America
Approximately 340 metal mines are currently operational across the US and Canada. Although the benefits of expansion are clear, both countries face significant challenges in rapidly scaling their respective mining operations to comply with government legislation. For example, all new passenger and light trucks sold in Canada are mandated to be emissions-free by 2035, while 50% of new passenger cars and light trucks sold in the US must be electric or hybrid by 2030.
The Fraser Institute estimates that establishing a viable domestic mine-to-car assembly plant supply chain will necessitate approximately 388 new mines across both countries. Lithium mines, however, can take six to nine years to become operational, while nickel mines may require 13 to 18 years from planning to production. Alongside opening new mines in North America, increasing midstream (refinement of raw materials) and downstream (battery cell and pack assembly) EV battery production capabilities is crucial.
Despite a near-term global slowdown in EV sales, establishing local supply chains helps ensure long-term market stability with more consistent price points, reduced logistical challenges, and minimal geopolitical risks. Moreover, localized extraction, refinement, and production will boost job creation and significantly reduce the environmental footprint of EV batteries by eliminating long-distance shipping. Notably, many countries lack stringent environmental standards, and North American mines and factories can potentially create processes that are more efficient (such as direct lithium extraction) and sustainable.
Developing new EV battery technologies
Substituting key materials and developing new technologies can further reduce dependence on a strained EV battery supply chain. For example, future EV batteries could store similar or additional energy using fewer or greener chemical elements such as silicon or sulfur.
Similarly, lithium iron phosphate (LFP) battery cathodes offer a more affordable, safer, and sustainable alternative to cobalt and nickel. Some Tesla models are already equipped with LFP battery cathodes, while other automotive companies, such as Ford and Volkswagen, plan to incorporate LFP technology into their respective EV batteries.
Additionally, many automotive manufacturers, including Mercedes-Benz and Toyota, continue to develop solid-state batteries that use solid ceramics (manufactured with lithium phosphorus oxysulfide, for example) instead of liquid electrolytes. These solid-state batteries support higher energy density, enable faster charging times, and significantly extend operational lifespans. Similarly, sodium-based EV batteries could eventually offer an abundant and cost-effective alternative to lithium.
Recycling and repurposing EV batteries
Recycling old EV batteries can significantly minimize supply chain reliance by reducing new material requirements. However, most EV battery recycling processes are still inefficient, as some facilities only manage to achieve a 1% lithium recovery rate. In contrast, Redwood Materials, partnering with Tesla, Ford, and Volvo, has attained an impressive 90% material recovery rate.
Li-ion batteries that can’t maintain an optimal state of charge (SOC) may retain significant energy storage capacity for stationary energy storage systems, backup power sources, and grid load balancing.
Figure 3. RePurpose Energy’s second-life battery product, highlighting dozens of Nissan LEAF battery modules arranged in a ventilated industrial container. (Image: Repurpose Energy)
RePurpose Energy, for example, installs upcycled EV batteries in large container units (Figure 3), delivering up to 1.2 MWh of capacity for commercial, industrial, and utility-scale applications.
Summary
The EV battery supply chain encompasses mining, processing, assembly, and end-of-life management. Supply chain resiliency, however, is limited by the high concentration of crucial mines, refinement facilities, and factories in a small number of countries spanning multiple continents. Establishing sustainable, local supply chains and improving EV battery technology and recycling techniques will help ensure more consistent price points and long-term market stability.
References
- Can Canada Mine Enough Minerals to Feed the EV Revolution?, Northern Ontario Business
- The EV Battery Supply Chain Explained, RMI
- Electric Vehicle Battery Supply Chains: The Basics, NRDC
- The Economics of Battery Supply Chains: Paving the Way for Electric Vehicle Expansion, Green Energy Consumers
- Complexities of Battery Supply Chain May Slow EV Adoption, Economist Intelligence
- Rewiring the Supply Chain for Electric Vehicle Batteries, Morgan Stanley
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