Strategic Dependencies in the Global EV Battery Value Chain: Concentration, Vulnerability and Policy Responses

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Strategic Dependencies in the Global EV Battery Value Chain: Concentration, Vulnerability and Policy Responses
Andrea Stocchetti – Venice School of Management, Ca’ Foscari University

Abstract
The transition to electric mobility represents one of the most significant transformations in the global automotive industry. While electrification is widely framed as a pathway towards sustainability and decarbonisation, it also entails a profound reconfiguration of industrial structures and global value chains. In particular, the rapid expansion of electric vehicle (EV) production has intensified the demand for critical raw materials such as lithium, cobalt, and nickel, as well as for battery cells and related technologies. This shift has exposed new forms of strategic dependency as well as asymmetry in the value creation (LaRocca 2020), raising concerns among policymakers and industry actors regarding supply security, technological sovereignty, and geopolitical vulnerability (Miao et al 2023).
Within this context, this paper investigates the structure of the global EV battery value chain and assesses the extent to which it is characterised by concentration and geographic asymmetry (Cresti et al. 2025).
A specific attention is given to the role of China, which has emerged as a dominant actor across several key stages of the battery ecosystem, including refining and cell manufacturing (Greitemeier et al. 2025).
The central research question guiding this study is: how concentrated is the EV battery value chain, and what are the implications of this concentration for the strategic dependency of major automotive regions such as the European Union and the United States?
To address this question, the paper pursues three main objectives. First, it seeks to quantify the degree of concentration across different segments of the battery value chain, including raw material extraction, refining, and battery manufacturing. Second, it aims to evaluate the level of trade dependency of Western economies (particularly the EU and the US) on dominant supplier countries, with a focus on China. Third, it explores the extent to which current policy responses, such as reshoring strategies and the development of circular economy initiatives, can effectively mitigate these dependencies in the medium term.
Such analysis has both empirical and theoretical relevance. First, it aims contributing to ongoing debates on the restructuring of global automotive value chains in the context of electrification and the return of industrial policy. The increasing use of tariffs, subsidies, and strategic investment programs (such as the US Inflation Reduction Act or the European Battery Alliance) reflects a broader shift away from purely efficiency-driven globalisation towards models that prioritise resilience and sovereignty. Second, from a theoretical perspective, the study engages with the literature on global value chains (GVCs) by highlighting how emerging technological transitions can reinforce, rather than reduce, asymmetries in value capture and control over critical resources.
The analysis is based on a quantitative research design using publicly available secondary data. Three main data sources are employed. First, data from the International Energy Agency (IEA), particularly the Global EV Outlook and related reports, are used to capture the evolution of battery production capacity and market shares across countries. Second, data from the United States Geological Survey (USGS) provide information on the production and reserves of key raw materials, including lithium, cobalt, and nickel. Third, international trade data from the UN Comtrade database and Eurostat are used to analyse import and export flows for relevant commodities and intermediate goods within the battery value chain.
The analysis combines descriptive statistics with indexes of concentration and trade dependency, for the assessment of the exposure of the EU and the US to external supply risks.
We expect to find a clear differentiation between stages of the battery value chain. Upstream activities, such as the extraction of raw materials, are relatively more geographically dispersed, with countries such as Australia, Chile, and the Democratic Republic of Congo playing key roles. However, downstream segments (particularly refining and battery cell manufacturing) are significantly more concentrated. In these stages, China holds a dominant position, controlling a substantial share of global refining capacity for critical minerals and leading battery production through firms such as CATL and BYD. This asymmetry results in a structural dependency of Western automotive industries on Chinese industrial capabilities, even when raw materials are sourced from other regions.
We also expect to draw significant policy implications from the results. While reshoring and diversification strategies are increasingly promoted in both the EU and the US, their implementation is constrained by high investment costs, long development timelines, and environmental and regulatory challenges. Similarly, while circular economy initiatives (particularly battery recycling) are often presented as a solution to resource scarcity, their short- to medium-term impact on reducing primary material demand remains limited. As a result, strategic dependencies are likely to persist in the foreseeable future.
From a theoretical perspective, the paper contributes to the literature on global value chains by illustrating how technological transitions can lead to new forms of concentration and dependency, rather than a simple rebalancing of global production networks. It also underscores the growing importance of industrial policy and state intervention in shaping the geography of value creation in the automotive sector. From a practical standpoint, the findings provide relevant insights for policymakers and industry stakeholders seeking to design more resilient and sustainable supply chains, highlighting the need for coordinated strategies that go beyond national approaches.
In conclusion, the transition to electric mobility, while essential for achieving climate objectives, is generating new geopolitical and industrial challenges. By providing a systematic assessment of concentration and dependency in the EV battery value chain, this paper sheds light on the structural constraints that shape the current transformation of the automotive industry and raises important questions about the feasibility of achieving both sustainability and strategic autonomy in an increasingly finite world.

References
Cresti, L., Mazzilli, D., Patelli, A., Sbardella, A., & Tacchella, A. (2025). Vulnerabilities and capabilities in the EU Automotive industry: Leveraging Input-Output Analysis and Economic Complexity. arXiv. https://doi.org/10.48550/arXiv.2501.01781
Greitemeier, T., Kampker, A., Tübke, J., & Lux, S. (2025). China's hold on the lithium-ion battery supply chain: Prospects for competitive growth and sovereign control. Journal of Power Sources Advances, 32, 100173. https://doi.org/10.1016/j.powera.2025.100173
LaRocca, G. M. (2020). Global value chains: Lithium in lithium-ion batteries for electric vehicles. Office of Industries, US International Trade Commission.
Miao, Y., Liu, L., Xu, K., & Li, J. (2023). High concentration from resources to market heightens risk for power lithium-ion battery supply chains globally. Environmental Science and Pollution Research, 30(24), 65558-65571. https://doi.org/10.1007/s11356-023-27035-9