Rechargeable lithium batteries (RLBs), including lithium-ion batteries (LIBs), are accelerating the electrification of transportation and grid energy storage. This transformation of the transportation and energy sector could bring more clean energy into our energy security. The RLB technology is growing rapidly in these sectors due to substantial cost reductions and mobility needs. Yet, the durability, reliability, and safety issues of RLB remain concerns due to the nature of high-energy content in RLB. The concern of limited resources of the critical materials to sustain the RLB use is also escalated. Reuse and recycling of RLB to extend the useful life and recovery of the critical materials become important. Here, we provide a critical review of these topics to give a timely assessment of the status and gap of the RLB technologies and their supply chain. A key concept to use a quantitative failure mode and effect analysis is proposed to help advance RLB design, development, manufacturing, and deployment. The approach can be a viable method to enable physical principle-based technology assessment, failure identification, quantification, and verification of reliability and safety issues in the RLB supply chain.