EVs, Critical Minerals, and the New Great Game: Study Warns Energy Transition Is Rewiring Global Power

Highlights

• Lithium demand could surge forty-fold by 2040 as EV growth drives unprecedented competition for critical minerals including cobalt, nickel, graphite, and rare earths.
• China dominates refining and processing of key battery and rare earth materials, giving it outsized geopolitical leverage over global clean energy supply chains.
• Resource nationalism is accelerating as nations impose export restrictions and domestic processing mandates to secure strategic mineral supply chains.
• REEx analysts argue the contest extends beyond EVs to a Great Powers Era 2.0 where controlling entire mine-to-magnet industrial ecosystems determines national power.
• Mineral diversification alone may not reduce strategic vulnerability without rebuilding downstream separation, metallization, alloy, and magnet manufacturing capacity outside China.

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A new study (opens in a new tab) by Prabesh Lama, drawing on research from the International Energy Agency (IEA), International Renewable Energy Agency (IRENA), World Bank, and a broad body of academic literature, argues that the rapid growth of electric vehicles (EVs) is transforming not only transportation but also geopolitics. As nations race toward decarbonization, demand for critical minerals such as lithium, cobalt, nickel, graphite, and rare earth elements is surging. The study concludes that the clean energy transition is creating a new form of strategic dependency centered on mineral supply chains, with China emerging as the dominant processing and refining power. For policymakers and investors, the message is clear: future economic and technological leadership may depend as much on mineral access as oil once did.

How the Study Was Conducted

Rather than conducting new experiments, Lama performed a qualitative review of academic literature, government reports, institutional data, and policy documents. The analysis examined mineral supply chains, EV growth projections, industrial policies, and geopolitical strategies employed by major powers including China, the United States, the European Union, and India.

What the Researchers Found

The study projects dramatic growth in demand for battery minerals by 2040, including a potential forty-fold increase in lithium demand and major increases in nickel, cobalt, graphite, and rare earth requirements. China was identified as the dominant refining and processing hub for many of these materials, particularly rare earths, graphite, cobalt, and lithium chemicals.

The analysis highlights growing resource nationalism, including export restrictions, domestic processing mandates, and state intervention designed to secure strategic supply chains. It also finds that countries increasingly view critical minerals as assets tied directly to national security, industrial competitiveness, and technological leadership.

For rare earth investors, the paper reinforces a central Rare Earth Exchanges™ (REEx) theme: mining is only part of the story. Processing, separation, refining, magnet manufacturing, and downstream industrial capacity increasingly determine who captures value and geopolitical influence.

Beyond EVs: The Great Powers Era 2.0 Connection

Where Lama's analysis becomes particularly relevant to Rare Earth Exchanges readers is how closely it aligns with our Great Powers Era 2.0 thesis.

The study frames critical minerals primarily through the lens of EV growth and decarbonization. REEx agrees—but views EVs as only one component of a much larger geopolitical transformation.

In Great Powers Era 2.0, nations increasingly treat supply chains as strategic assets rather than merely commercial networks. Industrial capacity, critical minerals, advanced manufacturing, energy systems, artificial intelligence, robotics, drones, semiconductors, and defense production are becoming intertwined pillars of national power.

From this perspective, EVs are not the sole driver of mineral demand. They are one demand vector among many.

The same rare earth elements powering electric motors also enable missile guidance systems, drones, robotics, advanced electronics, wind turbines, data centers, and emerging defense technologies. Meanwhile, countries across Asia, Latin America, Africa, Europe, and North America are increasingly seeking industrial sovereignty by moving downstream into refining, separation, alloy production, magnet manufacturing, and battery production.

Lama correctly identifies resource nationalism and supply-chain competition. However, REEx would argue that the emerging contest is not merely about controlling minerals. It is about controlling entire industrial ecosystems. China understood this decades ago. Rather than simply mining rare earths, it built dominance across separation, refining, metallization, alloy production, magnet manufacturing, and advanced industrial supply chains.

That distinction may be the study's most important unstated implication.

Important Caveats

The study largely synthesizes existing literature rather than generating new empirical evidence. Many conclusions—including projections for future mineral demand and geopolitical behavior—depend on assumptions that may change as technologies evolve.

The paper also repeats widely cited figures regarding China's refining dominance without deeply examining the pace at which non-Chinese capacity is emerging in Australia, the United States, Malaysia, Estonia, France, Japan, and other jurisdictions.

Likewise, the analysis assumes continued robust EV adoption while devoting less attention to potential demand variability, alternative battery chemistries, economic slowdowns, or the possibility that defense, AI infrastructure, robotics, and industrial reshoring may become equally important demand drivers for critical minerals.

What Happens Next?

The study points toward four major responses: diversification of supply chains, strategic mineral stockpiles, expanded recycling, and stronger international partnerships. REEx would add a fifth: rebuilding complete mine-to-magnet industrial ecosystems outside China. Without downstream separation, metallization, alloy production, magnet manufacturing, and advanced component fabrication, mineral diversification alone may not eliminate strategic vulnerability.

The paper ultimately reaches a conclusion increasingly shared across governments, investors, and industry leaders: the energy transition is not ending resource competition. It is merely changing the resources over which nations compete.

And in fact, REEx would take the argument one step further.

The world is not simply entering an era of EV competition. It is entering Great Powers Era 2.0—an age where industrial resilience, strategic supply chains, and control of critical mineral ecosystems increasingly determine economic and geopolitical power.

Citation: Lama, P. Electric Vehicle Expansion and the Geopolitics of Critical Minerals, 2026.