What exactly does the EV supply chain include?

Simply put, the EV supply chain is like cooking a meal: upstream is buying ingredients (lithium, cobalt, nickel, graphite, etc.), midstream is washing, chopping, and cooking (material refining, cell manufacturing), and downstream is serving the dish (battery assembly, vehicle production) and after-meal service (charging networks, recycling).^[1] Every step is interconnected; if any link fails, the whole meal can be ruined. For example, if upstream lithium supply tightens, midstream battery makers must bid up raw material prices, and downstream automakers either raise prices or cut production.

Chile and the Democratic Republic of the Congo hold about 50% of global lithium and cobalt reserves, respectively.^[1] So, mining supply in these two countries directly affects battery costs. Think of lithium and cobalt as the 'salt' and 'sugar' of batteries—without them, you can't make a battery. If these countries face policy changes, strikes, or natural disasters, global battery prices will fluctuate. Midstream manufacturing is dominated by Asia: China produces about three-quarters of the world's lithium batteries, accounts for 70% of global cathode material capacity, and refines more than half of the world's lithium, cobalt, and graphite.^[2] This means most of the world's battery 'cooking' happens in China, and automakers elsewhere rely heavily on China for battery supply.

Why is the midstream battery the 'heart' of the supply chain?

The battery is the core component of an EV and accounts for the highest cost share. It's like the human heart—without it, the vehicle won't run. Currently, there are two main battery types: NMC (nickel-cobalt-manganese) offers high energy density and long range, suitable for high-performance models like luxury EVs that prioritize acceleration and long-distance driving; LFP (lithium iron phosphate) contains no cobalt or nickel, is safer and cheaper, but has lower energy density, making it ideal for daily commuting in small city cars.^[6] You can think of NMC as the 'premium version' and LFP as the 'economy version,' each with its own use cases.

Midstream manufacturing is dominated by Asia, especially China. In 2025, global EV battery installations reached 1,187 GWh, up 31.7% year-over-year. CATL led with a 39.2% market share, the only battery maker above 30%, followed by BYD at 16.4%, together accounting for about 55% of the global market.^[9] This concentration gives battery makers strong pricing power, directly determining profit distribution across the chain. Think of it this way: if the battery maker is the 'head chef,' the automaker is the 'restaurant owner.' When the chef is skilled and famous, the owner must accept the chef's pricing, so profits naturally tilt toward the chef.

Why did the $7,500 U.S. tax credit disappear?

The IRS previously offered up to a $7,500 federal tax credit for new energy vehicles (IRC Section 30D), but under the 'One Big Beautiful Bill' Act, this credit expired on September 30, 2025. Vehicles purchased after that date no longer qualify.^[3] It's like a limited-time discount at the supermarket suddenly ending—consumers lose a big incentive when buying a car, which may dampen purchase intentions.

Previously, to qualify for the credit, starting in 2024, at least 50% of the value of battery critical minerals had to be sourced or processed in the U.S. or a free-trade partner, and battery components and critical minerals could not be produced or processed by a FEOC (Foreign Entity of Concern).^[4] This rule was designed to encourage supply chain localization and reduce dependence on countries like China. But now these rules are history, and the policy incentive is gone, impacting models and manufacturers that relied on subsidies. For example, some models that were priced lower thanks to the subsidy may have to raise prices, hurting sales.

How big is the impact of the 100% U.S. tariff on Chinese EVs?

Since September 27, 2024, the U.S. has imposed a 100% tariff on Chinese EVs under Section 301 of the Trade Act (a legal tool for imposing punitive tariffs on countries found to have 'unfair trade practices'), along with tariffs of 25%-100% on batteries and battery components.^[5] This directly raises import costs and pushes U.S. automakers to localize their supply chains. Imagine a Chinese EV that originally sold for $30,000—after a 100% tariff, it becomes $60,000, losing almost all competitiveness. So, Chinese EVs struggle to enter the U.S. market, giving American automakers more breathing room.

But tariffs also trigger ripple effects: Ford, GM, and other traditional automakers have delayed EV plans due to slowing demand and financial pressure. For example, GM cut its 2024 production target (from 300,000 to 250,000 units) and delayed the launch of a new U.S. EV plant to 2026; Ford delayed its electric pickup truck launch by a year to 2027, reduced its EV capital expenditure share from 40% to about 30%, and recorded $19.5 billion in special charges for its EV business at the end of 2025.^[12] It's like planning a big push but finding the market isn't buying, so you have to scale back and protect profits first.

Why has the NACS charging standard unified North America?

Charging connector standards were a major obstacle to EV adoption. Imagine if your phone only worked with a specific brand's charger—annoying, right? Same for EVs. Tesla opened its NACS connector in November 2022, and in 2023-2024, SAE International standardized it as J3400. The U.S. government officially recognized it, and major automakers like BMW, Mercedes-Benz, and Toyota plan to switch.^[7] This means future North American charging stations will be uniformly compatible with NACS, just like USB-C unified phone charging. Consumers get more convenient charging, and charging station utilization improves.

Tesla's Supercharger network may become industry infrastructure, and other operators like ChargePoint and EVgo need to adapt.^[13] For investors, this changes the competitive landscape of the charging industry: whoever adapts to NACS first can capture more users.

Why do EVs need twice as many chips as gas cars?

EVs require about 2-2.5 times more chips than traditional gas vehicles, mainly from power semiconductors (like silicon carbide SiC devices) used in traction inverters, onboard chargers, and battery management systems.^[10] Why so many? Because gas cars use engines and transmissions to control power, while EVs rely entirely on power electronics to convert and distribute electrical energy. For example, the battery management system must monitor the temperature and voltage of every cell in real time, requiring many sensors and control chips. Think of an EV as a 'giant smartphone,' with chips as its 'brain' and 'nerves.'

So, the semiconductor supply chain is equally critical in the EV industry. For a broader look at semiconductors, check out our Semiconductor Supply Chain Overview.

What are the sub-sectors of U.S. EV concept stocks?

From upstream to downstream, U.S. EV concept stocks roughly fall into four categories: upstream lithium mining (like Albemarle, the world's largest lithium producer, with brine and hard-rock lithium resources in Chile, Australia, and the U.S., and a key lithium supplier to major EV and battery makers like Tesla^[8]), midstream batteries (but major players are in A-shares/HK stocks, few in the U.S.), downstream vehicles (like Tesla, Rivian, Lucid^[14]), and charging infrastructure (like ChargePoint, EVgo^[13]).

Among them, Rivian focuses on the R1T pickup, R1S SUV, and is advancing its mid-size platform R2/R3; Lucid's core products are the luxury sedan Lucid Air and SUV Lucid Gravity, with plans to launch a mid-size platform vehicle by the end of 2026.^[14] On the charging side, ChargePoint is one of North America's largest charging network operators, with about 46,500 charging stations in the U.S. as of mid-2026; EVgo is one of the largest public DC fast-charging networks in the U.S., originating from an NRG Energy project in 2010 and going public via SPAC (special purpose acquisition company, a faster listing method than traditional IPO) in 2021.^[13] There are also indirectly related companies in semiconductors, materials, etc. For a more systematic classification, see U.S. Stock Sector Classification: GICS 11 Sectors.