A general depiction of the value chain for the lithium-ion vehicle battery industry is found in
Figure 4. The flow of activities begins with key materials and precursors, and moves on through
cell components and electronics, to integrated systems, and finally to the relevant original
equipment manufacturers (OEMs), which make vehicles using battery systems.
In the popular press, one oft-cited worry for the supply chain is a potential shortage of the raw
material, lithium. However, research indicates that this concern is overblown. First, the quantity
of lithium required to make an electric car battery is very small; one battery maker estimates that
existing lithium resources could supply 33 billion full hybrid-electric vehicles (Compact Power,
2010). Second, while much of the world’s supply of lithium is concentrated in South America
(Chile, Argentina and politically unstable Bolivia), large deposits are also found elsewhere,
including in China, Afghanistan, and Australia. A number of new lithium mining companies are
appearing across the globe (Wright, 2010). In our interviews with battery firms, no respondents
expressed concern about lithium supply.