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Tesla is the premium entry in the electric car market, with a starting price of $75,000. According to the Wall Street Journal, the high-end “Signature” model costs $132,000, slightly more than the base price for Porsche’s AG’s 911 GT3.

Even with a $7,500 federal tax credit, an assortment of state tax credits, and $10,000 in fuel saving over five years, the driver’s investment is over $110,000 – far beyond the reach of the average family.

However, Tesla’s luxury styling and impressive performance give high-end buyers the best of both worlds – luxury transportation and the satisfaction of environmental stewardship.

In that light, it might surprise some that Tesla’s success depends, in large part, on lithium mining.

Tesla cars are made of carbon fiber and powered by racks of lithium-ion batteries. Strong, light, and cost-efficient, carbon fiber is being used increasingly by commercial airplane manufacturers. On board Boeing’s 787, the batteries are lithium-ion as well.

Like Boeing and Airbus, auto manufacturers are under economic and regulatory pressure to produce more fuel-efficient products.

In 2012, the Obama Administration implemented CAFÉ (Corporate Auto Fuel Efficiency) standards that require automakers to manufacture cars that get 35.5 miles per gallon in 2016. The standard ratchets up to 54.5 mpg by 2025.

The real goal is to replace gas and diesel car engines with electric motors.

The key to achieving that goal is to reduce the vehicle’s weight. Two of the best ways to accomplish that are to substitute carbon fiber for metal and replace heavier traditional heavier batteries with the more costly lightweight lithium-ion types.

The advantages of carbon fiber are sparking huge investments in the technology.

Tesla is building a $5 billion battery factory near the lithium mines in northern Nevada in hopes of reducing battery costs by at least 30 percent as it plans to ramp up production to 55,000 cars this year.

Reducing costs is important to Tesla, because its competitors are intent on producing more affordable electric cars.

BMW has introduced a new two-seat electric commuter car in the $15,000 range. That prompted BMW and partner SGL to invest more than $200 million in a new carbon-fiber production facility in Moses Lake, where low-cost hydro power is abundant.

Hybrid car sales are growing. In 2010, roughly 275,000 of the 11.6 million autos sold in the United States were hybrids, according to the Electric Drive Transportation Association. Pure electric cars registered just 19 sales. Fast forward to 2013, when plug-in vehicles sales were nearly 97,000.

Carbon-fiber and lithium production each have their competitive and environmental challenges.

Low cost electricity is vital to keeping carbon-fiber prices reasonable. The material has to be competitive enough to give it an advantage over traditional metal. The key for BMW has been hydropower, the least expensive of any generating source. However, hydropower is not as abundant in drought years. Just ask California.

In the case of lithium mining, the problem is ensuring that enough water is available. Lithium is found in abundance in South America, where the cheapest extraction method is to flood a lithium deposit with water to release the lithium. In lithium-rich regions of Chile, extracting the metal uses two-thirds of the area’s fresh drinking water.

Then there is the matter of where the electricity comes from to recharge electric cars at home and in parking lots. Right now fossil fuel power plants or hydropower dominate the electric power grids in the West.

The point is it is important that new technologies be developed. It also is important to remember that electric car makers are subject to the same economic and environmental challenges as other manufacturers: production costs, availability of supplies, affordable energy, and abundant water.

Don C. Brunell is a business analyst, writer and columnist. He recently retired as president of the Association of Washington Business, the state’s oldest and largest business organization, after 28 years. He now lives in Vancouver. He can be contacted at theBrunells@msn.com.