Environment Transportation Who Makes Electric Car Batteries? EV Battery Market and Materials Where is the electric car battery market heading? By David M. Kuchta David M. Kuchta Writer Wesleyan University, University of California, Berkeley David Kuchta, Ph.D. has 10 years of experience in gardening and has read widely in environmental history and the energy transition. An environmental activist since the 1970s, he is also a historian, author, gardener, and educator. Learn about our editorial process Published November 27, 2021 Scientists testing lithium car battery with electric motor car in battery research facility. Monty Rakusen / Getty Images Share Twitter Pinterest Email Transportation Automotive Active Aviation Public Transportation In This Article Expand What Is in an EV Battery? Supply Chain Concerns EV Battery Manufacturing Battery Recycling Electric vehicle (EV) batteries have come a long way since the first electric vehicles were invented in the 1830s. Modern electric vehicles run on lithium-ion batteries, which were introduced in 1991. As the EV battery and energy storage markets grow, manufacturers continue to experiment with chemistries, configurations, and production processes—with the common goal of creating more efficient batteries that last longer, cost less, and have a lower environmental impact. What goes into an EV battery is already changing and is likely to continue to change over the next decades. What Is in an EV Battery? An EV battery is a pack of individual battery cells, each about the size of a AA battery. Those cells are clustered into protective frames called modules, each with its own circuitry, and those modules are clustered together into a pack. The entire pack is managed by a Battery Management System and a cooling system that regulates the heat and voltage, protects the battery from draining too much or too quickly, and manages the charging and discharging of energy. EV batteries work by moving lithium ions (charged atoms) through a solution called an electrolyte, which carries positively charge ions between separate electrodes called anodes and cathodes. This process creates an electric current that is sent to the EV's motor. What the electrodes, separators, and electrolytes are made of can vary. Lithium is the indispensable element, of course, but among the most frequently used other components are aluminum, carbon, cobalt, iron, manganese, nickel, oxygen, phosphorus, and silicon. New combinations and chemistries emerge all the time, using other elements like sodium or tin and sulfur. (These are not the so-called rare earth minerals that are used in other parts of EVs as well as in gas-powered cars.) Assembling a battery module. Tanaphot Iamjaro / Getty Images Supply Chain Concerns EVs compete with electronics and energy storage devices—both of them growing industries—for lithium-ion batteries. The International Energy Agency projects that 145 million EVs could be on the roads by 2030. Demand for minerals for supplying batteries for EVs and energy storage is expected to grow by five- to ten-fold by 2030 and ten- to thirty-fold by 2040. According to the Electric Vehicle Battery Supply Chain Analysis from Automotive Manufacturing Solutions (AMS), there is concern over whether supply will match the demand across the battery supply chain. Yet AMS predicts that “global capacity for lithium-ion batteries will increase from 475 gigawatt hours (GWh) in 2020 to more than 2,850 GWh by 2030,” with 80 new gigafactories across the globe to produce lithium-ion cells and batteries. None of the key elements in EV batteries are rare. The question is whether or not the production of them can keep pace with the increasing demand for electric vehicles. Cobalt and Replacements Anti-mining groups protest the proposal to expand lithium mining in Portugal, May, 2021. Horacio Villalobos / Getty Images Cobalt is the most controversial of the minerals used in EV batteries, since its main source, the Democratic Republic of Congo, has a history of human rights abuses. While manufacturers have reduced the percentage of cobalt from 60% in the first generation of lithium-ion batteries to 15-20% cobalt today, reducing that percentage to zero is part of the U.S. Department of Energy's National Blueprint for Lithium Batteries released in June 2021. Replacing cobalt with more nickel poses its own problems, however, depending on how environmentally-friendly (or unfriendly) the mining is. Cobalt- and nickel-free electric vehicles do exist already and have proved commercially successful. Lithium mining has also come under criticism from environmentalists and indigenous people for its harmful effects. EV Battery Manufacturing Three countries—China, Argentina, and Bolivia—account for 58% of the world's lithium reserves, though Australia puts about half of the world's lithium into production. Abundant lithium supplies (86 million tons) exist around the world, including in the United States. China is the world's leader in refining those raw materials for batteries, and more than two-thirds of battery manufacturing is controlled by three companies—CATL, LG, and Panasonic—based in China, South Korea, and Japan, respectively. Three other companies bring that market share up to 87%. In the United States, however, 70% of battery cells and 87% of battery packs are produced domestically rather than imported—in large part due to the industry dominance of Tesla, known for its vertical integration. Its Panasonic batteries are produced in California. What Is Vertical Integration? Vertical integration involves keeping the manufacturing processes in-house, rather than outsourcing them to independent suppliers, as most auto companies do today. Traditional car manufacturers have historically relied on outsourced suppliers, so as they increase their own production of EVs, concerns about supply chains have grown with them. European and American EV manufacturers are taking steps to bring battery manufacturing home. Battery Recycling Battery recycling is likely to play a key role in meeting such a high demand for minerals. 95% of the minerals in EV batteries can be recycled, and numerous startup companies are already competing to garner market share. By January 2021, over 100 companies worldwide were recycling EV batteries or planned to do so soon. The problem is that EV batteries are expected to last a long time, and the demand for batteries may outpace the supply of recycled ones. Used EV batteries can be deployed as-is for stationary energy storage, thus reducing their availability for recycling. The challenge is for battery recycling companies to reach economies of scale to make recycling worth their efforts. As in other industries, recycling efforts can be little more than industry greenwashing.