Raw materials for electric cars: Where do they come from and how secure is their supply?

Electric cars are much more efficient, emit no harmful exhaust gases, and require fewer operational fluids and substances. However, critics say: While e-cars are efficient and locally emission-free, the problem lies elsewhere. The Achilles' heel of Tesla and others is the raw materials, which especially go into the production of the batteries: rare earth elements, often mined under questionable conditions, are as necessary as a large amount of energy – so the accusation goes.

But what is the actual situation? How are the raw materials that Tesla uses in its vehicles obtained? Let's take a closer look.

Main raw material for most vehicle batteries: Lithium

Fact is: Tesla needs large amounts of lithium for its batteries, just like every other manufacturer. Currently, there is no way around this element if you want to build powerful batteries with large capacities. The good news for manufacturers: There is no direct shortage of lithium, as the raw material is sufficiently available in the Earth's crust.

The bad news: There is a lack of extraction capacity, and the extraction methods are energy- and water-intensive. The energy often comes from fossil fuels, and the extracted water can affect local groundwater levels. Improvements are in sight but are not yet market-ready on a large scale.

Additionally, the lion's share of the world's available lithium comes from Australia, South America, and China, where mining often comes at the expense of indigenous populations or risks the geopolitical exploitation of market power. The latter is especially true, as China holds a significant market share when it comes to processing substances from all e-car raw materials.

In 2022, about 130,000 tons of lithium were mined, and a 50-kilowatt-hour battery requires about eight kilograms. Tesla sold nearly 1.31 million vehicles in 2022, thus needing 10,480 tons of lithium. This number could be even higher, as Tesla batteries are usually noticeably larger than 50 kWh. CEO Elon Musk recognized the lithium bottleneck some time ago, calling lithium mining a "license to print money." The reason for this statement: Between 2020 and 2022, the price of lithium rose by over 400%. While it has somewhat stabilized, it remains a risk factor for all buyers due to the expected increase in demand. In the meantime, Musk has also considered entering the lithium mining business with Tesla itself, which has not yet happened.

More critical than lithium: Cobalt and Nickel

Even more critical than lithium are the elements cobalt and nickel, which are also used in e-car batteries. A major portion of the global supply comes from mines in Congo (70% of the world's cobalt), the Philippines, and Indonesia, where questionable working conditions, including child labor, are part of everyday business, as well as Russia (especially nickel), which has been heavily sanctioned since 2022 and is therefore out of the picture as a supplier for the foreseeable future. Although Tesla is trying to reduce its nickel and cobalt needs, for example by using "clean" LFP batteries (lithium iron phosphate) in its base vehicles or by optimizing battery chemistry, it still cannot completely avoid them.

In 2022, 190,000 tons of cobalt and 3.3 million tons of nickel were mined worldwide. Tesla required nearly 2,000 tons of cobalt for 500,000 vehicles produced in 2020, which was better in terms of percentage (amount per vehicle) than most competitor models, but in absolute numbers, this has probably increased significantly due to higher sales – even though the average cobalt content in Tesla batteries has decreased.

Copper as an important wiring raw material

Less negatively viewed, because it has been used in electrical engineering for a very long time and is available in large quantities, is copper. However, this metal also causes problems for humans and the environment during extraction. Tesla needs an estimated 82 kilograms of copper per vehicle, which corresponds to over 107,000 tons of copper for 1.31 million vehicles sold. Although copper is easy to recycle, and Tesla plans to quarter its needs with a new electrical system soon, the reduced need for "new" copper still has to be covered through mining. Additionally, copper isn't cheap: currently, about $8,400 per ton is required, amounting to approximately $900 million for all Tesla vehicles produced in 2022.

Little known: Anode raw material graphite

The least known raw material in an e-car battery: graphite. The material is found at the anode of almost all batteries, including those of Tesla. A significant portion of the raw material comes from China, where it is either mined or produced synthetically. Both methods are harmful to the environment or humans, which also negatively impacts the e-car boom. The extracted amount was 1.3 million tons in 2022, of which 850,000 tons came from China. Other reserves are found in Brazil, Mozambique, and Madagascar. In 2021, Tesla secured almost the entire production of a mine in Mozambique, including the associated processing plant in the USA, thus ensuring part of its supply.