The escalating and unpredictable cost of oil, the concentration of major oil resources in the hands of a few politically sensitive nations, and the long-term impact of CO2 emissions on global climate constitute a major challenge for the 21st century. They also constitute a major incentive to harness alternative sources of energy and means of vehicle propulsion. Today's lithium-ion batteries, although suitable for small-scale devices, do not yet have sufficient energy or life for use in vehicles that would match the performance of internal combustion vehicles. Energy densities 2 and 5 times greater are required to meet the performance goals of a future generation of plug-in hybrid-electric vehicles (PHEVs) with a 40–80 mile all-electric range, and all-electric vehicles (EVs) with a 300–400 mile range, respectively. Major advances have been made in lithium-battery technology over the past two decades by the discovery of new materials and designs through intuitive approaches, experimental and predictive reasoning, and meticulous control of surface structures and chemical reactions. Further improvements in energy density of factors of two to three may yet be achievable for current day lithium-ion systems; factors of five or more may be possible for lithium–oxygen systems, ultimately leading to our ability to confine extremely high potential energy in a small volume without compromising safety, but only if daunting technological barriers can be overcome.