The global transition to electric vehicles (EVs) is not just a transformation in mobility—it’s a reinvention of industrial supply chains. Beneath the surface of this clean-energy shift lie decades-long challenges: raw material sourcing, metal-refining bottlenecks, geopolitical frictions, and technological disruption that few industries have faced at such scale or pace.
According to the 2024 World Energy Outlook by the International Energy Agency (IEA), global battery demand topped 1 terawatt-hour in 2024 and is projected to triple by 2030, powered by EV adoption, grid storage, and industrial decarbonization. Yet as demand accelerates, EV and battery manufacturers are colliding with structural weaknesses in the supply chain, ranging from rare earth mineral dependencies to volatility in battery metals (e.g., Lithium) prices, and overreliance on Chinese production that controls the majority of refined metal output.
To grasp the urgency of the issue, it’s essential to understand the critical materials required to manufacture EV batteries. The table highlights several key inputs and their associated challenges, most notably, the heavy supply chain dependence on a select few countries outside the US, significant environmental concerns that could hinder carbon reduction goals, and the rapidly growing demand that is outpacing constrained supply. These intersecting pressures underscore a) that the US is structurally at risk, b) the need for strategic action across policy, innovation, and investment.
| Material | 2024 Current Demand (page 64) | 2030 Projected Demand | Key Supply Chain Challenges |
| Lithium | ~0.15mt | 3–4x increase (~0.5mtt) | Environmental impact (water use); underdeveloped refining capacity outside China |
| Cobalt | ~0.2mt | 2x increase (~4mt) | ESG issues (child labor in DRC); geopolitical and ethical sourcing concerns |
| Nickel | ~3.4 mt | 1.5x increase (~5mt) | High CAPEX requirements for battery-grade nickel |
| Graphite | ~1.3 mt | 2–3x increase (~3.5mt) | Over 90% of processing in China; energy-intensive refining |
| Rare Earths (REEs) | ~0.3mt | ~0.8mt+ | Refining concentrated in China; limited recycling infrastructure |
| Copper | ~22mt | 50%+ increase (~30mt) | Underinvestment in new production and permitting challenges (~25+ years) |
Building on the table above, the U.S. imports ~50-70 percent of all critical materials that go into battery manufacturing, with China controlling 80–90 percent of global processing. This leaves the US EV manufacturing highly exposed to geopolitical risks, trade disruptions, and price volatility. Without robust domestic mining, refining, and recycling, US clean energy goals face serious supply chain fragility.
A recent report from the IEA indicates that in 2024, globally clean-energy financing was projected at $2.1 trillion, with 40 percent of it going towards electrified transportation. The US alone has earmarked $312B for EV and battery manufacturing capabilities. With almost one-third of all Fortune 500 companies committed to carbon neutrality in the coming decades, renewable sources and EV manufacturing are going to continue to grow and outpace internal combustion engines. While near-term policies from the current administration might differ from the investments, Europe and Asia (driven by China) are aggressively investing in clean energy infrastructure, and the US will have to catch up and pay a costly price similar to the materials famine that it is experiencing now.
Reader Question:
As the global race (governments, companies) for EV adoption and clean energy accelerates, will the US lead in strengthening its supply chain or continue to remain dependent on foreign supply chains to power its decarbonized future?