EV batteries, primarily EV Battery Raw Materials, rely on four key materials. The geographical and corporate control over each varies, creating different vulnerabilities across the supply chain.
Lithium: The White Gold
Lithium is the lightest metal and the foundational element of the EV battery. Despite the recent price volatility, long-term demand growth, driven by both EVs and grid-scale energy storage systems (ESS), remains strong.
Extraction Dominance (The Miners): Control is geographically split. Australia is the world’s largest producer of lithium ore (spodumene), primarily from hard rock mines. The “Lithium Triangle” of Chile, Argentina, and Bolivia holds the vast majority of global reserves in brine deposits.
Processing Dominance (The Chokepoint): This is where control tightens dramatically. In 2025, China accounts for an estimated 70% of global lithium refining EV battery. This means the raw lithium mined in Australia or the Lithium Triangle must often pass through Chinese processing facilities to be turned into the high-purity lithium carbonate and lithium hydroxide required for battery cathodes.
Cobalt: The Stability EV Battery Raw Materials
Cobalt is essential for battery stability, longevity, and performance, particularly in high-energy-density batteries like Nickel Manganese Cobalt (NMC) cathodes.
Extraction Dominance: The Democratic Republic of Congo (DRC) is the undisputed giant, responsible for over 70% of global cobalt mining. This concentration EV battery significant geopolitical and ethical supply chain risks.
Processing Dominance: Once again, China dominates the midstream. Chinese companies control a significant portion of the DRC’s cobalt output and maintain overwhelming control over the global cobalt refining capacity needed to produce battery-grade cobalt chemicals.
Nickel: The Energy Booster
Nickel is crucial for achieving high energy density, allowing EVs to travel farther on a single charge. The move towards nickel-rich cathodes (like NMC 811) drives increasing demand.
Extraction Dominance: Indonesia has emerged as the global leader in nickel production, aggressively expanding its mining and processing sector. Other EV battery producers include the Philippines and Russia.
Processing Dominance: Indonesia has enforced policies to build domestic processing capacity, but key investment and technology still flow largely from global players, including China, which remains a significant force in the refining of nickel sulfates for the battery industry.
Graphite: The Anode Master
Graphite is the main material used for the anode side of the battery. Both natural and synthetic graphite are used, and there is a high reliance on EV battery jurisdictions.
Dominance: China is the largest global source of natural graphite and dominates the production of synthetic graphite and nearly 100% of the world’s commercial anode materials. This high level of control over the anode material is another major supply chain vulnerability for Western automakers.
China’s Vertical Integration Strategy: Control by the Midstream
The key narrative in the 2025 battery materials market is not who mines the most, but who refines and processes the most. China’s strategic dominance EV battery from a decades-long policy of building vast, technologically advanced, and cost-efficient midstream capacity.
From Mine to Gigafactory: The Complete Ecosystem
China has cultivated a fully integrated EV ecosystem that connects the raw mineral supply to the final battery cell:
Refining and Chemical Production: By controlling the conversion of raw lithium ore and cobalt concentrate into battery-grade chemicals, China sits at the crucial chokepoint. This allows Chinese firms to dictate supply terms, manage price volatility, and, most importantly, control quality and specifications for the final product.
Battery Manufacturing: This midstream control is leveraged by China’s battery giants, such as CATL and BYD, which command approximately 60% of the global EV battery production capacity. This scale dominance creates massive economies of EV battery and cost advantages, making it incredibly difficult for new, non-Chinese entrants to compete.
Technological Advancement: China is also setting the pace for next-generation battery technologies. In 2025, it is projected to dominate production capacity for emerging chemistries like Sodium-ion (Na-ion) batteries (over 90% of capacity) and maintain a massive lead in Solid-State batteries, ensuring its control extends well into the next decade of battery innovation.
Geopolitical Battlegrounds: The Race for Resilient Supply Chains
The concentration of refining capacity presents a clear economic and security risk to the United States and Europe, spurring EV battery government intervention in what is now being called the Critical Minerals Race.
Western Counter-Strategies: De-risking the Supply Chain
Major Western economies are spending billions to establish independent and resilient critical mineral supply chains, bypassing the Chinese midstream:
The United States: The Inflation Reduction Act (IRA) provides significant tax credits and subsidies to encourage the domestic sourcing and processing of battery minerals, favoring materials extracted or processed in North America or in Free Trade Agreement partner countries. This strategy is aggressively drawing investment into U.S. and Canadian mining and refining projects.
Canada’s Strategic Investment: Canada, rich in EV battery, cobalt, and lithium deposits, has launched major government-backed initiatives to boost domestic production and processing. The goal is to position Canada as a key ethical and reliable North American supplier of battery materials for the North American EV industry.
Europe’s Localisation Efforts: The European Union is pushing for the establishment of battery “gigafactories” and the localisation of the entire value chain—from mining to recycling—to reduce its import dependency and secure supply for its own transition targets.
The New Colonialism and Ethical Sourcing
The global race is also focused on securing direct extraction deals in the primary resource nations—especially in Africa and South America. This competition raises serious concerns about ethical sourcing and environmental sustainability:
DRC Cobalt: Western and Chinese companies are locked in a struggle over control of the DRC’s cobalt mines. Western governments are increasingly mandating supply chain transparency and high ESG (Environmental, Social, and Governance) standards to avoid association with humanitarian issues, forcing a shift towards “ethically sourced” EV battery.
The Lithium Triangle: Chile, Argentina, and Bolivia are strategic hubs. Countries are vying for access, with some nations like Bolivia exploring granting exclusive production rights to consortia involving Chinese and Russian state-owned enterprises, highlighting the geopolitical stakes of the Lithium Gold Rush.
Innovation and Diversification: The Quest for Alternatives
The geopolitical competition and supply risk have accelerated the search for alternative battery chemistries that use less—or none—of the most concentrated minerals. This is changing the demand landscape in 2025.
The Rise of LFP
The increased adoption of LFP batteries is a direct response to the volatility and concentration risks associated with nickel and cobalt. LFP EV battery use abundant and cheap iron and phosphate instead of expensive cobalt and nickel, making them a more cost-effective choice for standard-range EVs and stationary storage.
LFP’s Implication: This shift reduces the demand pressure on cobalt and nickel, potentially diversifying the supply chain. However, LFP technology is currently also dominated by Chinese manufacturers (e.g., CATL and BYD), meaning the reliance on a single geographic region for finished battery cells remains high.
Direct Lithium Extraction (DLE)
Technological advancements like Direct Lithium Extraction (DLE) are reshaping the mining landscape. DLE promises a faster, more environmentally friendly, and water-efficient method of extracting lithium from brines compared to traditional evaporation ponds. If commercially scaled successfully, DLE could open up new, previously uneconomical lithium reserves globally, particularly in North America, thus aiding supply chain diversification.
The Circular Economy: Battery Recycling
The ultimate long-term solution for self-sufficiency is the circular economy—recovering critical materials from spent EV batteries. Recycling is projected to become a significant source of lithium, cobalt, and nickel in the coming years, reducing reliance on virgin mining. Countries and companies that invest heavily in large-scale, efficient battery recycling infrastructure in 2025 will be the supply chain masters of the 2030s.
