Geopolitical Uncertainty and Upstream Reconfiguration in EV Battery Supply Chains

• In Event: Advances in clean energy under federal policy shifts: dynamic pricing, supply chains and non-targeted incentives

Abstract

Introduction/Background: Geopolitical tensions, U.S.–China strategic competition, and the lasting effects of the COVID-19 pandemic have intensified concerns over the resilience and reconfiguration of supply chains in strategic industries, particularly electric vehicle (EV) battery supply chains. Policymakers increasingly emphasize “de-risking,” “decoupling,” and supply chain relocation, yet there is still limited firm-level evidence on whether and how upstream supply networks in these industries are actually changing. This gap is especially significant because deep-tier supplier relationships are difficult to observe, despite their importance for understanding industrial dependence and resilience. 
Purpose/Research Question: This study examines the effect of geopolitical uncertainties on upstream suppliers’ networks in the EV battery sector. This research asks three related questions: whether lead firms are diversifying their supplier base under geopolitical uncertainty; whether upstream supply networks are becoming more geographically reconfigured or remain spatially anchored; and whether structurally central suppliers constrain supply chain relocation by sustaining critical dependencies across tiers. 
Methods: To address these questions, the study conducts a longitudinal network analysis of upstream supply chains for three global lead firms in the EV battery sector from 2018 to 2024. Using firm-level supply chain mapping data from the FactSet Database, the research reconstructs multi-tier supply networks and compares changes in supplier composition, supply categories, and network structure over time. Key network measures, including supplier diversity, network density, and structural centrality, are used to assess patterns of reconfiguration and identify nexus suppliers that occupy critical positions in the network. 
Results/Findings:The findings show that, first, first-tier supplier bases and sourcing categories become more diverse over time, suggesting that firms respond to geopolitical uncertainty by broadening their immediate supplier portfolios. Second, overall network density increases, indicating that firms are not simply relocating supply chains but are also building greater redundancy and more interconnected sourcing structures. Third, deep-tier suppliers remain geographically anchored, reflecting constraints associated with natural resource endowments, industrial specialization, and regional production ecosystems. Fourth, a relatively small number of nexus suppliers occupy structurally central positions and limit substitutability, thereby constraining the extent to which upstream supply chains can be relocated. 
Conclusion/Implications: These findings suggest that supply chain change in the EV battery sector is better understood as selective reconfiguration rather than straightforward relocation. The study contributes empirical evidence to policy debates on industrial resilience and the practical limits of supply chain decoupling in critical technology industries. More broadly, it shows that policy efforts to reshape strategic supply chains must account not only for direct suppliers, but also for deeper-tier dependencies and the structural influence of nexus suppliers embedded in upstream production networks.

Author

• Linyi Guo, The University of Manchester
  Presenting Author