The modern car is just about unrecognizable against its counterpart of a few decades ago. Not in terms of shape or performance, but emissions.

The whole industry, pushed hard by legislation, has drastically reduced exhaust pollutants. Hybrids, plug-in hybrids and electric cars do their bit to reduce emissions further, operating some or all of the time with no tailpipe emissions at all.

But according to Bloomberg, electric cars actually increase pollution in places like China, which produces the largest proportion of the world's lithium-ion battery cells--and, more importantly, their precursor materials.

The critical element here isn't the cathode with lithium or nickel in it, but the anode, often made of graphite.

A typical electric car can use 110 pounds of graphite, hybrid cars around 22 lbs, and even e-bikes use a couple of pounds. Laptops and smartphones use proportionally smaller amounts, but basically anything containing a battery with a graphite anode increases demand for the substance.

China supplies much of that demand, but graphite production is the cause of significant pollution in the country--a land already choked by smog, airborne pollution and other environmentally-damaging detritus.

MORE: Chinese Vehicle Sales Soar Past 20 Million, Smog Worse Than Ever

Some of the pollution is direct, from graphite dust in the air, which is damaging whether inhaled or brought down to the earth in rain. But much is indirect, a result of the hydrochloric acid used to process mined graphite into a usable form.

As is often the case, industrial chemicals can leak into groundwater or streams; in this case, hydrochloric is highly corrosive, and damaging to all forms of life.

The problem is considered sufficiently grave by Chinese authorities that the country has suspended or closed dozens of graphite mines in an effort to curb the pollution.

In Shandong province alone--which is responsible for 10 percent of global graphite supply--a total of 55 graphite operations have been suspended due to environmental breaches.

Beijing smog

Beijing smog

The closures, however, worry executives in the battery and auto industries who are responsible for assuring supplies of raw materials to keep cell production lines humming.

China is responsible for a huge share of global graphite production, and as demand for electric vehicles grows on top of increased consumer electronics production, battery prices may be forced upward.

And demand for electric-vehicle batteries will only rise as plug-in vehicle production rises in coming years, with more and higher volumes of cars coming into the market from more makers.

Tesla Motors' proposed 'Gigafactory' could double demand for graphite in batteries--the equivalent of six new graphite mines coming online.

Josh Landess, advanced transportation analyst at Bloomberg New Energy Finance, notes the "obvious irony" that demand for cleaner vehicles in the west means increased pollution in the east--and suggests that these problems can lead to pricing and supply issues for the west.

MORE: Tesla's Lithium-Ion Battery Gigafactory: What You Need To Know

The solution, of course, is to clean up production in countries like China--a country now experiencing the same industrialization that took place over a century in the west, which had many of the same growing pains.

But China is industrializing in a world that is not only more environmentally-conscious, but far more aware of events and practices elsewhere due to the explosion of digital communications via mobile phones and the Internet.

Western countries began attempts to clean up energy production and manufacturing at large during the 1970s and 1980s, at the same time vehicle emission limits were instituted for the first time. Ozone-harming CFCs were banned, companies dumping pollution into rivers were reprimanded, and vehicles gained emissions-controlling features.

The world will watch to see how China balances the twin goals of economic growth and environmental improvement. The country clearly feels it cannot afford to lose business--but nor can its people thrive in areas choked by smog and poisoned by pollution.


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