Electric vehicle supply chain

International commitments reflected in the Paris Agreement have led to efforts toward a renewable energy transition as a strategy for climate change mitigation. Green capitalism and sustainable development approaches have informed policy in many countries of the Global North, resulting in rapid growth of the electric vehicle industry, and resulting demands for raw materials.[5]

The battery supply chain includes:

Upstream activities include mining for required raw materials, which include critical materials such as cobalt, lithium, nickel, manganese, and graphite as well as other required minerals such as copper.[2][6]

Midstream activities include refining and smelting of raw mineral ores with heat or chemical treatment to achieve the high-purity materials required for batteries,[2][1] as well as the manufacture of cathodes and anodes for battery cells.[6]

Downstream activities include manufacturing of the batteries and end goods for the consumer.[2]

End of life activities include recycling or recovery of materials when possible.[2]

China dominates the electric car industry, accounting for three-quarters of global lithium-ion battery production. Most refining of lithium, cobalt, and graphite takes place in China. Japan and Korea host significant midstream cell manufacturing and downstream supply chain activities. Europe and the United States have a relatively small share of the supply chain.[1]

Upstream activities (mining and processing) largely take place in countries with extractivist economies such as Australia, Chile, and the Democratic Republic of the Congo.[1][5]

Recycling of battery minerals is limited, but is expected to rise in the 2030s when there are more spent batteries. Increasing recycling would bring considerable social and environmental benefits.[7]

Supply chain risks include sustainability challenges,[9] political instability and corruption in countries with mineral deposits,[10] and human rights or environmental justice concerns.[11][2] The supply of critical minerals is concentrated in a few countries: for example, the Democratic Republic of the Congo produced 74% of the world's cobalt in 2022.[12] Extreme weather events, geopolitical issues, international trade regulation, consolidation of supply chain companies into a few large corporations, and rapidly changing technologies all present additional challenges to building a resilient supply chain.[2]

Ethical supply chains must address concerns about child labour, corruption, and environmental degradation.[10] Mining for critical minerals can threaten public health or human rights in communities affected by mining.[2] Child labour and lack of safety regulations frequently endanger mine workers. The environmental effects of mining these materials can pollute or deplete soil and water; and the effects can last for centuries. Human rights violations frequently go undetected.[2] Monitoring these issues is challenging, because battery minerals typically travel 50,000 miles from where they are extracted to downstream manufacturing facilities.[2]

Mineral extraction in the Global South for manufacturing of batteries and vehicles consumed in the Global North may replicate historical patterns of injustice and colonialism.[5]