It is one of the defining competitions of our age: The countries that can make batteries for electric cars will reap decades of economic and geopolitical advantages.
The only winner so far is China.
Despite billions in Western investment, China is so far ahead — mining rare minerals, training engineers and building huge factories — that the rest of the world may take decades to catch up.
Even by 2030, China will make more than twice as many batteries as every other country combined, according to estimates from Benchmark Minerals, a consulting group.
Here’s how China controls each step of lithium-ion battery production, from getting the raw materials out of the ground to making the cars, and why these advantages are likely to last.
Mining
China controls essential rare minerals
China controls
41% of the world’s cobalt
28% of lithium
China controls
41% of the world’s cobalt
28% of lithium
Source: CRU Group Note: Data for 2022
Electric cars use about six times more rare minerals than conventional cars because of the battery, and China gets to decide who gets the minerals first and at what price.
Although China has few underground deposits of the essential ingredients, it has pursued a long-term strategy to buy its way into a cheap and steady supply. Chinese companies, relying on state assistance, acquired stakes in mining companies on five continents.
China owns most of the cobalt mines in Congo, which has the majority of the world’s supply of this scarce material needed for the most common type of battery. American companies failed to keep up and even sold mines to their Chinese counterparts.
As a result, China controls 41 percent of the world’s cobalt mining, and the most mining for lithium, which carries a battery’s electric charge.
China controls
6% of the world’s nickel
78% of graphite
5% of manganese
China controls
6% of the world’s nickel
78% of graphite
5% of manganese
Source: CRU Group, U.S.G.S. Note: Data for 2022
Global supplies of nickel, manganese and graphite are much larger and batteries use only a fraction. But China’s steady supply of these minerals still gives it an advantage. China’s investments in Indonesia will help it become the largest controller of nickel by 2027, according to forecasts by CRU Group, a consulting firm.
Graphite is mostly mined in China. U.S. producers synthesize graphite at much greater cost.
Western countries also own mines abroad, and are trying to catch up with China. But they have been more reluctant to put money into countries with unstable governments or poor labor practices. And they have been slow to ramp up their own production.
A new mine can take more than 20 years to reach full production. Although the United States is investing to tap its significant lithium reserves, the effort has run into a host of local and environmental concerns.
Refining
The world relies on China to process minerals
China refines
95% of manganese
73% of cobalt
70% of graphite
67% of lithium
63% of nickel
China refines
95% of manganese
73% of cobalt
70% of graphite
67% of lithium
63% of nickel
95% of manganese is refined in China
73% of cobalt
70% of graphite
67% of lithium
63% of nickel
Source: CRU Group Note: Data for 2022
Regardless of who mines the minerals, nearly everything is shipped to China to be refined into battery-grade materials.
Once ore is taken from the ground, it is usually pulverized and then treated with heat and chemicals to isolate the mineral compounds. The process is wasteful: Cobalt generates about 860 pounds of waste rock for each pound of refined cobalt powder.
Refining needs huge amounts of energy. Battery minerals require three to four times as much energy to make as steel or copper. The preferred form of lithium, for example, needs to be heated, steamed and dried. Supported by the government with cheap land and energy, Chinese companies have been able to refine minerals at larger volume and lower cost than everyone else. This has caused refineries elsewhere to close.
Refining also often causes pollution, and Chinese refineries benefit from less stringent environmental regulations. Grinding graphite causes air pollution. Processing nickel generates toxic waste, which must be disposed of in special structures in the ocean or underground. Experts say that using more sustainable methods to process battery minerals drives up costs.
Today the United States has little processing capability. A refinery typically takes two to five years to build. Training workers and adjusting equipment can take additional time. Australia’s first lithium refinery, which has some Chinese ownership, was approved in 2016 but failed to produce battery-grade lithium until last year.
Components
China makes most of the parts that go in a battery
China makes
77% of cathodes
92% of anodes
74% of separators
82% of electrolytes
Lithium ions move between cathode and anode during charging and discharge.
82% of electrolytes
China makes 74% of separators
77% of cathodes
92% of anodes
Lithium ions move between cathode and anode during charging and discharge.
Sources: IEA, Yano Research Institute Note: Data for 2021
China became the largest battery producer partly by figuring out how to make battery components efficiently and at lower cost.
The most important component is the cathode, which is the battery’s positive terminal. Of all battery materials, cathodes are the most difficult and energy intensive to make. Until the last several months, the most common cathode used a combination of nickel, cobalt and manganese, also known as NMC cathodes. This formula allows a battery to store a lot of electricity in a small space, providing an electric car with longer range.
China has invested in a cheaper alternative that has now taken half the cathode market. Known as LFP, for lithium iron phosphate, these cathodes use widely available iron and phosphate instead of nickel, manganese and cobalt.
For western countries, LFP is an opportunity to bypass bottlenecks in the mineral supply. But China produces almost all the world’s LFP.
China makes 73%
of NMC cathodes
99% of LFP cathodes
China makes 73% of
NMC cathodes
99% of LFP cathodes
Source: CRU Group Note: Data for “NMC cathodes” category includes NMC, NCA, NMCA; “LFP cathodes” includes LFP, LMFP. Data for 2022.
Today the United States makes only about 1 percent of the world’s cathodes, all of which are NMC. American companies are interested in LFP, but they must team up with Chinese companies that have the experience producing it.
Chinese companies make most of the battery’s other components. They dominate the production of anodes, the negative end of a battery. China also sells the most separators, a layer that goes between the cathode and anode to prevent short-circuiting. Electrolytes, made of mostly lithium salts and solvent, are needed for conductivity, and the top four electrolyte producers in the world are Chinese.
Assembly
China makes the most batteries and the most cars
China makes 66% of
the world’s battery cells
Cathode
2.8”
Separator
Anode
Each car has thousands of cells.
China makes 66% of
the world’s battery cells
2.8”
Cathode
Each car has thousands of cells.
Separator
Anode
Source: IEA Note: Data for 2021. Graphic depicts cylindrical cells used by many U.S. car brands.
China has the most electric cars on the road and nearly all of them use Chinese-made batteries. In 2015, Beijing enacted policies to block foreign rivals and raise consumer demand. Chinese battery manufacturers like CATL and BYD grew at the expense of their Japanese and South Korean competitors and became the largest in the world.
Eight years later, the Biden administration is now pursuing a similar strategy to foster battery development in the United States.
But in a business with huge capital costs and thin profit margins, Chinese companies have a big head start after years of state funding and experience.
Battery assembly is complex and technical. To make one, cathode and anode materials are attached to thin metal sheets each about one-fifth the thickness of a human hair. These are then stacked with separators, moistened with electrolytes, and rolled up. The entire process needs to take place in rooms that minimize air particles and moisture.
China can build battery factories at nearly half the cost of countries in North America or Europe, according to Heiner Heimes, a professor at RWTH Aachen University in Germany. The main reasons: Labor costs are lower, and there are more equipment manufacturers in China.
China makes 54% of the world’s electric cars
China makes 54% of the world’s electric cars
Source: IEA Note: Data for 2021
American investors remain wary about putting money into electric vehicles. Traditional cars are still very profitable, American workers need to be trained in new skills, and U.S. government incentives to help the E.V. industry could disappear with the next presidential election cycle.
China has spent more than $130 billion on research incentives, government contracts and consumer subsidies, according to the Center for Strategic and International Studies. Electric car buyers in China get tax rebates, cheaper vehicle registration, preferential parking and access to an extensive charging network. China’s investments have allowed the country to lead the world in production, equipment and product design.
Experts say it is next to impossible for any other country to become self-reliant in the battery supply chain, no matter if it has cheaper labor or finds other global partners. Companies anywhere in the world will look to form partnerships with Chinese manufacturers to enter or expand in the industry.
“There is no way anybody is going to become successful in electric vehicles without having some type of cooperation with China, either directly or indirectly,” said Scott Kennedy, a senior adviser at C.S.I.S.
FAQs
Can the World Make an Electric Car Battery Without China? ›
Experts say it is next to impossible for any other country to become self-reliant in the battery supply chain, no matter if it has cheaper labor or finds other global partners. Companies anywhere in the world will look to form partnerships with Chinese manufacturers to enter or expand in the industry.
Can the world make enough batteries for electric cars? ›While the world does have enough lithium to power the electric vehicle revolution, it's less a question of quantity, and more a question of accessibility. Earth has approximately 88 million tonnes of lithium, but only one-quarter is economically viable to mine as reserves.
Can the US make electric car batteries? ›Georgia, Kentucky, and Michigan are going to dominate electric vehicle battery manufacturing in the United States by 2030. Kansas, North Carolina, Ohio and Tennessee will also be key players.
Do all EV batteries come from China? ›China dominates the market for minerals that go into EV batteries, Lange said. For the United States and American automakers to get into the electric vehicle market, they have to rely in part on Chinese firms, he said. “It would be really hard to build a robust supply chain without some connection to China.”
What country produces the most electric car batteries? ›Chinese firms dominate the electric vehicle (EV) battery market, accounting for 56% of the market share. Four of the ten largest battery manufacturers are based in China.
Is lithium mining bad for the Environment? ›The process of extracting lithium consumes significant amounts of water and energy, and lithium mining can pollute the air and water with chemicals and heavy metals. In addition, mining lithium can disrupt wildlife habitats and cause soil erosion, leading to long-term ecological damage.
Is lithium mining worse than oil drilling? ›Lithium mining does have an environmental impact, but it is no worse than oil drilling. This is especially true when you consider the carbon emissions produced from petroleum products during their usage, as compared to lithium-ion batteries that have little to no GHG emissions during their use.
Why doesn't the US make lithium batteries? ›Because lithium deposits come embedded in other metals and minerals, extracting lithium can be incredibly difficult. More refineries—the plants where raw lithium is processed into a concentrated form of the metal that goes into batteries—need to be built in North America.
Who makes the forever battery for EV cars? ›In late 2021, QuantumScape illustrated that its forever battery performed in 4-layer formats up to 800 charging cycles. A quarter later, the company scaled successful results to 10-layer batteries up to 800 cycles.
Is there enough lithium for all cars to be electric? ›Yes, the world has enough lithium for our electric vehicles, decades into the future. The world is currently not producing enough of it to keep up with demand. This could be a major bottleneck this decade.
What American companies make EV batteries? ›
- Proterra is headquartered in Burlingame, California, and was founded in 2004. ...
- BMZ USA, Inc. is a custom manufacturer of batteries founded in 1994. ...
- Panasonic Co. ...
- Microvast manufactures batteries and battery systems for electrically-driven transportation.
- #1. Tesla Roadster.
- #2. Chevrolet Corvette EV.
- #3. BMW iX.
- #4. Bollinger B1 and B2.
- #5. Chevrolet Bolt EV Crossover / EUV.
- #6. Lucid Air.
- #7. Ford F 150 EV (2022)
- #8. Rivian R1T.
CATL is the leading brand in EV battery manufacturing, securing 34% of the market share. Based in China, CATL manufacturers solid-state batteries and lithium-ion batteries for companies including BMW, Toyota, and Honda, to name a few.
Who has the largest lithium reserves in the world? ›Where is lithium available from? With 8 million tons, Chile has the world's largest known lithium reserves. This puts the South American country ahead of Australia (2.7 million tons), Argentina (2 million tons) and China (1 million tons). Within Europe, Portugal has smaller quantities of the valuable raw material.
Which country has the most lithium in the world? ›Bolivia. Bolivia has the highest identified lithium resources in the world with 20 million tonnes, as per the US Geological Survey data.
Where does the US rank in lithium production? ›| Rank | Country | Year |
|---|---|---|
| 2021 | ||
| 3 | China | 14,000 |
| 4 | Argentina | 6,200 |
| — | United States | 5,000 |
Lithium production moved overseas beginning in the 1970s, and now there is only one active mine left in the country, in Clayton Valley near Silver Peak, Nevada.
How polluting is lithium mining? ›For Lithium mining, it is estimated to be in a similar range at around 1.3+ million tonnes of carbon annually, with every tonne of mined lithium equating to 15 tonnes of CO2 into the air.
What is the dirty secret of lithium mining? ›But the problem lies in the process of lithium extraction. Lithium is usually found in underground deposits of clay, in mineral ore or underground pockets of water. Removing these deposits disturbs the soil, the water table, and causes damage to the local ecosystem. Any form of extraction tends to harm the planet.
What is the biggest problem with lithium batteries? ›Lithium-ion batteries contain metals such as cobalt, nickel, and manganese, which are toxic and can contaminate water supplies and ecosystems if they leach out of landfills. Additionally, fires in landfills or battery-recycling facilities have been attributed to inappropriate disposal of lithium-ion batteries.
What battery will replace lithium? ›
Researchers at Vienna University of Technology have developed an oxygen-ion battery based on ceramic materials that has a longer lifespan than lithium-ion batteries. The new battery can be regenerated and does not require rare elements, making it an ideal solution for large energy storage systems.
Where is the largest lithium deposit in the United States? ›The Thacker Pass Lithium Mine is a lithium clay mining development project in Humboldt County, Nevada, which is the largest known lithium deposit in the US and one of the largest in the world. There has been significant exploration of Thacker Pass since 2007.
What is the longest lasting battery technology? ›Solid-state batteries are believed to last longer — with up to seven times more recharges during their lifetime, according to CAR Magazine. They're also believed to be safer, because the solid electrolyte material is fireproof, unlike lithium-ion batteries, which are known to pose a fire risk.
Who has the best battery technology? ›Toyota Motor is considered the leader in solid-state battery patents. Currently, EVs with solid-state batteries are not commercially available but are expected to be used in EVs from 2025. Moreover, solid-states are being tested in EVs by BMW and Ford.
What is better than lithium for batteries? ›1. Aqueous Magnesium Batteries. If it were not for a few key issues, magnesium metal would be an ideal candidate to replace lithium 一 it is the eighth most common element, non-toxic, has a negative electrochemical potential, and has a high capacity thanks to its additional valence electron.
What happens if lithium runs out? ›Running Out of Lithium
An inability to produce enough lithium would result in severe delays to the roll out and implementation of electric transport and renewable power – as such, it is fair to question whether there is enough of the prized element to meet global needs.
A typical EV battery has about 8 kilograms of lithium, 14 kilograms of cobalt, and 20 kilograms of manganese, although this can often be much more depending on the battery size – a Tesla Model S' battery, for example, contains around 62.6 kg (138 pounds) of lithium.
How much lithium is in the earth's crust? ›Lithium makes up about 0.002 percent of Earth's crust, but in geologic terms, it isn't particularly rare, Stillings says.
What is the holy grail of battery technology? ›Solid-state batteries were heralded as the "holy grail of batteries" — their solid-state core is the perfect complement to solid-state electronics — in the Technology Outlook 2030 report by market research firm DNV (Det Norske Veritas, which means "the Norwegian truth").
What company is building the forever battery? ›In late 2021, QuantumScape illustrated that its forever battery performed in 4-layer formats up to 800 charging cycles. A quarter later, the company scaled successful results to 10-layer batteries up to 800 cycles.
What battery company did Bill Gates invest in? ›
Why Bill Gates invested in this tiny start-up that helps turn lithium into batteries. Bill Gates' investment fund Breakthrough Energy Ventures recently invested $10 million in a seven-person start-up with no revenue and no customers, Mangrove Lithium.
Where are battery plants being built in US? ›Battery plant locations
As we can see below, most of the planned battery plants in the US are concentrated along a north-south band from Michigan to Alabama. The report notes that the highest growth of battery manufacturing capacity (based on announced plans), will be in Kentucky, Tennessee, Georgia, and Michigan.
Most of the domestic critical mineral deposits needed for EV batteries — lithium, cobalt, nickel, copper — are near Native American reservations.
How many electric cars are made in the USA? ›There was a record 60% increase in EV registration in the first quarter of 2022, about 158,600, which is 4.6% of all new car registrations in the country. Interestingly, companies manufactured approximately 442,000 electric vehicles in 2022 alone.
Who is the largest battery maker in the world? ›World's largest battery maker announces major breakthrough in energy density. In one of the most significant battery breakthroughs in recent years, the world's largest battery manufacturer CATL has announced a new “condensed” battery with 500 Wh/kg which it says will go into mass production this year.
What stock is the forever battery? ›Solid Power (SLDP)
Forever battery stocks like Solid Power (NASDAQ:SLDP) are headed higher, too. For one, the U.S. Department of Energy just awarded the company over $5 million to develop its technology, “which could significantly help lower the price of EV batteries,” according to Electrek.com.
Tesla is dominating the US EV market while other automotive giants like Ford, General Motors, Stellantis, Volkswagen and Hyundai are struggling to provide strong competition. But still, we are seeing new players like Lucid Motors, Karma, Fisker and Vinfast entering the US EV space, underlining the market's potential.
Is Ukraine rich in lithium? ›Ukraine harbors some of the world's largest reserves of titanium and iron ore, fields of untapped lithium and massive deposits of coal. Collectively, they are worth tens of trillions of dollars.
Does Russia have lithium? ›Lithium is not mined in Russia, so self-sufficiency in this metal is a problem, dealing with which is high on the agenda. High demand for lithium is a global trend driven by the rapid development of electric vehicles, primarily in China.
Where is lithium found in nature? ›Lithium does not occur as the metal in nature, but is found combined in small amounts in nearly all igneous rocks and in the waters of many mineral springs. Spodumene, petalite, lepidolite, and amblygonite are the more important minerals containing lithium.
Will we run out of lithium? ›
U.S. geological survey the world is getting better at mining battery metals including lithium. As of 2021, it was estimated that the world had 88 million tonnes of lithium resources.
Can lithium be recycled? ›We use a combination of mechanical and hydrometallurgical technologies to recycle the battery materials. Our industrial-scale, low-CO2 processes allow us to recover lithium, cobalt, manganese and nickel from the battery for reuse in the production of new batteries.
Does China have lithium deposits? ›According to the statistics published by USGS, China has a lithium reserve of 5.4 metric tonnes, accounting for an estimated 13% of the total lithium reserve globally.
What is inside the only lithium producer in the US? ›Albemarle Corporation, which supplies lithium to Tesla and other automakers and operates the only active lithium mine in the US at the Silver Peak mine in Nevada, owns the ~1,100-acre site that includes the former mine in Kings Mountain, along with a lithium hydroxide plant and R&D facility.
Who owns the largest lithium mines? ›Chile holds the world's largest lithium reserves and is the world's second-largest producer. Lithium is currently produced from hard rock or brine mines. Australia is the world's biggest supplier, with production from hard rock mines. Argentina, Chile and China mainly produce it from salt lakes.
Are there enough rare earth metals for electric cars? ›The world has enough rare earth minerals and other critical raw materials to switch from fossil fuels to renewable energy to produce electricity and limit global warming, according to a new study that counters concerns about the supply of such minerals.
Can the world run out of lithium? ›U.S. geological survey the world is getting better at mining battery metals including lithium. As of 2021, it was estimated that the world had 88 million tonnes of lithium resources.
Why is there a shortage of electric car batteries? ›Why is there a battery shortage? The main issue regarding the battery shortage for EVs is a shortage of lithium. The production of lithium primarily comes from China. However, they also use tools and materials for lithium mining and lithium battery factories in Western Australia.
Does US have rare earth metals? ›Currently, the only U.S. rare earths mining and processing facility is the Mountain Pass mine in California's Mojave Desert. Operated by MP Materials, the mine accounts for close to 16 percent of the world's rare earths production.
What raw materials are needed for electric car batteries? ›The major materials required in lithium-ion batteries are the chemical components lithium, manganese, cobalt, graphite, steel, and nickel. These components all have different functions in the typical electric vehicle battery that contribute to improved performance.
What rare minerals are needed for electric car batteries? ›
These EV battery chemistries depend on five critical minerals whose domestic supply is potentially at risk for disruption: lithium, cobalt, manganese, nickel, and graphite.
Why don t we mine lithium in the US? ›Because lithium deposits come embedded in other metals and minerals, extracting lithium can be incredibly difficult. More refineries—the plants where raw lithium is processed into a concentrated form of the metal that goes into batteries—need to be built in North America.
Which country has the most untapped lithium? ›Bolivia. Bolivia has the highest identified lithium resources in the world with 20 million tonnes, as per the US Geological Survey data.
What battery is better than lithium? ›Sodium-ion batteries are a promising alternative to lithium-ion batteries — currently the most widely used type of rechargeable battery. Both types of batteries use a liquid electrolyte to store and transfer electrical energy, but differ in the type of ions they use.
Who is building the forever battery? ›That's exactly what QuantumScape did at the end of 2020, with a single-layer battery cell. Sure, that's not enough to power a car. But since then, the company has scaled up its breakthrough battery technology to 10-layer and 16-layer cells. In December 2022, the company began sending out its 24-layer cell prototype!
Where do electric car batteries go when they are no good? ›Yes, when EV batteries reach the end of their working life, they will be recycled. In the US, when the typical 8- to 10-year battery warranty has expired, most EV providers can reuse the batteries for a second or third time.
What is the failure rate of EV batteries? ›More than 14,000 EV owners use the Recurrent app. With the data supplied by all those electric vehicles, Recurrent has created a report that demonstrates precisely what the history of the batteries is in various EV brands and models. One general conclusion is that the replacement rate of EV batteries is about 1.5%.
Why is no one buying electric cars? ›High purchase price and lack of charging stations were the most-cited reasons for not wanting an EV, followed by limited driving range and time required to charge.