Electric Vehicles with Lithium Batteries: An Update on the Technology, the Cost, & the Supply Chain

Current electric vehicles are not as environmentally friendly as advertised.  Most modern electric vehicles run on what is essentially a souped-up compound handphone battery.  That means lots of lithium in all those batteries.

A Tesla Model S battery holds roughly 12 kilogrammes of lithium.  Grid storage needed to balance renewable energy demands more, given the size of the battery required.  Manufacturers remain secretive about battery technology, which makes effective recycling difficult.  Most lithium-ion batteries still end up in landfills, where they break down and leach into the water table and surrounding land.

The Fire Risk Has Not Gone Away

Lithium cathodes degrade over time, which is why they cannot simply be placed into new batteries.  Lithium is reactive, and fires at recycling plants remain a genuine ongoing risk where batteries are stored improperly or crushed while mistaken for lead-acid cells.  Tesla vehicles have a documented tendency to ignite on battery impact, releasing toxic gas and acid that water cannot extinguish.  Chevrolet Bolts suffered spontaneous rear-seat combustion tied directly to battery placement.

This risk has not eased with scale.  Research firm Modo Energy found that over 100 local authorities across New York State have enacted moratoria or outright bans on battery storage deployment, covering roughly 8 per cent of the state, driven by fire safety concerns and the absence of unified permitting standards.  A technology this widely deployed should not still be generating local government bans over basic fire risk in 2026.

The Mining Cost, Unchanged

Lithium mining remains more environmentally damaging than drilling for oil.  Land gets strip-mined and rendered useless for anything else.  Extraction uses roughly 2 million litres of water per metric tonne of lithium produced.  Miners drill into salt flats and pump mineral-rich brine to the surface, evaporating it over months into a mixture of manganese, potassium, borax, and lithium salts, refined through repeated evaporation pools over 12 to 18 months before lithium carbonate emerges.

Toxic chemicals such as hydrochloric acid can leak from these evaporation pools into local water supplies.  In Argentina’s Salar de Hombre Muerto, lithium mining contaminated streams used for drinking water, livestock, and crop irrigation, driving a documented spike in cancers and other illnesses in surrounding communities.  Chile’s Atacama salt flats, among the most striking landscapes on earth, now carry mountains of discarded salt beside canals running an unnatural, contaminated blue.

The Financial and Supply Chain Picture, Updated

Lithium-ion battery cell costs fell from US$568 per kilowatt-hour in 2013 to US$74 by 2025, according to MIT Technology Review.  Lithium iron phosphate cells, the cheaper end of lithium chemistry, now average US$52 per kilowatt-hour.  Sodium-ion cells average US$59, still costlier than LFP specifically, though cheaper than lithium-ion chemistry overall.

Supply chain concentration has only tightened.  The International Energy Agency’s Global EV Outlook 2026 found China controls 99 per cent of LFP cathode components, 92 per cent of anode components, and 100 per cent of LFP battery cells worldwide.  Cobalt prices doubled over the past year after the Democratic Republic of Congo, source of nearly two-thirds of global cobalt supply, imposed a temporary export ban in February 2025, later converted into export quotas from October 2025.  China further eased import tariffs on recycled battery material, black mass, from January 2026, pulling recycling capacity from outside China back toward Chinese facilities, deepening rather than easing the concentration this industry already suffers from.

CATL, the world’s largest battery maker, and Chinese automaker Changan unveiled the Nevo A06 in February 2026, the first mass-production passenger EV running on a sodium-ion pack, with cell mass production due by the end of 2026.  CATL’s Naxtra cell reaches 175 Wh/kg today, approaching LFP-level density, and the company targets full LFP parity within three years for around 600 km of range.  Sodium-ion runs on an abundant element rather than lithium, cobalt, or nickel, and performs better in cold conditions, holding roughly 90 per cent capacity at minus 40 degrees Celsius, a genuine operational advantage current lithium chemistry cannot match.

Solid-state batteries remain the promise that keeps not arriving.  Toyota planned solid-state EVs by 2020.  It is 2026, and the technology still has not reached mass production anywhere at meaningful scale.

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Terence Nunis | Executive Chairman, Equinox Zenith & Red Sycamore | Author, The 1% Playbook: The Billionaire Cheat Code