EVs' global supply chain isn't so pretty

Even as electric vehicle production ramps up around the world, the industry is reliant on nations with known human rights abuses and environmental violations for the batteries needed to power EVs.

The Democratic Republic of Congo supplies about 70 percent of the world's cobalt, a key material for today's EV batteries. But according to Wilson Center, a U.S. public policy think tank, cobalt mines in Congo rely on about 40,000 children — some as young as 6 years old — or about 16 percent of the 255,000 people who work in the mines. Workers are often paid less than $2 per day.

Meanwhile, China is responsible for 90 percent of global rare-earth element supply and is instrumental in processing raw materials for EV batteries around the world. But the country has been under fire for its environmental practices, as evidenced by an artificial, toxic lake in Inner Mongolia made of black sludge and hazardous chemicals that result from rare- earth mining.

In 2015, BBC News called the "dystopian and horrifying" lake a byproduct of the world's "tech lust."

Human rights and environmental abuses in the supply chain are likely to come under greater scrutiny in the coming years as the demand for batteries increases. Automakers plan to roll out dozens of new electric models between now and the end of the decade.

Much can be done in the U.S. to address those issues in the supply chain, said Abigail Wulf, director of the Center for Critical Minerals Strategy, part of a Washington, D.C., nonprofit advocacy for clean U.S. energy. That includes increasing domestic mining and processing capabilities and working with allies to source materials from elsewhere and put pressure on other countries to clean up their practices.

"The main thing is instituting a level of radical transparency within our supply chains," Wulf said.

She said it was important for the U.S. to build up a strong relationship with allies to ensure that the materials used in EVs on American roadways are sourced ethically. Elected officials in Canada, for instance, have in recent months aimed to boost mining operations in that country to become a greater part of the supply chain.

"We want to work with our allies to try to create, whether it's a new trade deal or trade agreement ... to commit to sourcing things that adhere to high standards," Wulf said. "And we want to use traceability frameworks, whether it's blockchain or something else, to prove that things actually do adhere to these standards throughout the entire supply chain."

Some automakers and suppliers have put an emphasis on addressing labor rights and environmental issues in the EV supply chain. BMW, for instance, in 2018 began working with a U.K. startup to use blockchain technology to ensure its EVs used only "clean cobalt" and not materials mined with child labor, according to a Reuters report. (A BMW spokesperson did not return a request for comment.)

During the past year, Tesla, the world's largest EV manufacturer, has begun to use cobalt-free lithium-iron-phosphate batteries in many of its vehicles, and Ford and Volkswagen have said they will do the same.

In addition to ethical reasons to move away from cobalt, auto companies see financial incentives. Most of the world's cobalt is processed in China, where trade tension with the U.S. remains high.

But there is also a consideration of future legal liability. Companies could find themselves the subjects of lawsuits, as was the case in 2019, when Tesla and tech companies, including Apple and Microsoft, were accused by a human rights nonprofit of being complicit in the deaths of children in Congo.

The infrastructure bill President Joe Biden signed into law in November includes provisions aimed at boosting the nation's domestic battery production capabilities. It includes $6 billion to foster domestic battery materials processing, manufacturing and recycling, as well as $140 million for a domestic rare- earth demonstration facility, which would extract and refine the materials.

Wulf said those provisions are a good start for the U.S. as it looks to become less dependent on other countries for EV batteries.

"We need these baby steps to build up some of our capacity in the first place and then hopefully keep it going," she said. "We want to keep the momentum going on this to make sure that investments continue to pour in and our nascent industries continue to grow."