Global supply chains for energy technologies are increasingly exposed to systemic risks due to high production concentration. An IEA report highlights bottlenecks and significant economic impacts.
Energy technologies rely too heavily on supply chains
Energy technologies are currently supported by supply chains increasingly exposed to systemic risks. High production concentration and bottlenecks can jeopardize entire industrial sectors.
These are the main findings of the Energy Technology Perspectives 2026 report recently published by the IEA, which highlights how every supply chain presents at least one critical step where alternative production capacity is insufficient.
In case of disruptions, the economic effects can be immediate and significant: up to $17 billion per month for global electric vehicle production. The emerging picture is that of a rapidly growing, yet structurally fragile system.
Energy technologies’ supply chains are dominated by a few countries
The IEA analysis shows that the production of key clean technologies is highly concentrated in a few countries. In particular, China holds a dominant position across much of these supply chains, with a share between 60% and 85% of production capacity, exceeding 95% in some segments.
This concentration primarily concerns intermediate production phases, such as material processing and the manufacturing of strategic components. The refining of critical minerals, for example, represents one of the most vulnerable points. Magnetic rare earths, used in wind turbines and electric vehicles, are an emblematic case, with an almost total dependence on China.
Despite new industrial and mining projects, the IEA emphasizes that no significant changes in supply chain diversification are expected before 2030.
Where are the bottlenecks in energy supply chains?
One of the report’s central elements is the introduction of the “N-1” analysis, which simulates the removal of the main global supplier. The results show that, even with alternative production capacity, every chain has at least one phase where less than 25% of demand can be met without the primary producer.
This data highlights the presence of “weak links” in supply chains. These are often intermediate steps where production is highly specialized and concentrated. Under these conditions, a single disruption can propagate throughout the entire chain, blocking final production.
The IEA also points out that concentration increases systemic risk: the greater the dependence on a single actor, the greater the potential impact of geopolitical events, trade restrictions, or physical shocks .
Economic impacts of supply chain disruptions
The economic consequences of potential disruptions are significant and vary across technologies.
In the case of batteries, a one-month blockade of Chinese exports would result in a production loss of approximately $17 billion for the global electric car industry, with more than half of the losses concentrated in the European Union .
For photovoltaics, a similar disruption would reduce module production outside China by approximately $1 billion per month, with 40% of the impact localized in India and Southeast Asia .
These figures show how supply chains represent a crucial factor for economic, as well as energy, stability.
Pressure on supply chains increases with market growth
The global market for clean technologies reached nearly $1.2 trillion in 2025, with an average annual growth of 20% over the last decade .
According to the IEA, the value could reach $2 trillion by 2035, and even approach $3 trillion in more ambitious scenarios. This expansion exerts increasing pressure on supply chains, which must support rapidly rising demand.
Electric cars represent the dominant segment, covering approximately three-quarters of the total market value.
The role of global trade in energy technology supply chains
International trade remains central to the functioning of supply chains. After a decline in 2024, global exchanges grew by approximately 10% in 2025.
China remains the leading exporter, with over $165 billion in exports, accounting for approximately 15% of its trade surplus. In the long term, the value of trade could more than double, from $290 billion to $620 billion by 2035.
This confirms that global demand is widespread, while production remains concentrated, making trade indispensable.
How are investments and production evolving?
Investments in industrial production have slowed. After peaking at $220 billion in 2023, they fell below $200 billion in 2024, with a further decline in 2025 .
This dynamic is also linked to an overcapacity in some sectors, such as photovoltaics and batteries. However, future investments will be increasingly geared towards diversifying supply chains.
The European Union and the United States are increasing their share of global investments, with a potential to exceed 35% between 2031 and 2035.
What levers can reduce risks in supply chains?
The IEA emphasizes that security and competitiveness are closely linked. Reducing risks requires interventions at multiple levels: developing production capacity in critical segments, geographical diversification, and international cooperation.
Cost structure plays a central role. In many cases, competitive advantage stems from factors like low-cost energy, automation, and industrial scale. Without targeted interventions, current concentrations are likely to persist.
