Lithium-air batteries are investigated for propulsion aggregates in vehicles as they theoretically offer at least 10 times better energy density than the best battery technology (lithium-ion) of today. A possible input to guide development is expected from Life Cycle Assessment (LCA) of the manufacture, use and recycling of the lithium-air battery. For this purpose, lithium-air cells are analyzed from cradle to grave, i.e., from raw material production, cathode manufacturing, electrolyte preparation, cell assembly, use in a typical vehicle to end-of-life treatment and recycling. The aim of this investigation is highlighting environmental hotspots of lithium-air batteries to facilitate their improvement, in addition to scrutinizing anticipated environmental benefits compared to other battery technologies. Life cycle impacts are quantified in terms of climate impact, abiotic resource depletion and toxicity. Data is partly based on assumptions and estimates guided from similar materials and processes common to lithium-ion technologies. Laboratory scale results for lithium-air systems are considered, which include expectations in their future development for efficiency gains. At the present level of lithium-air cell performance, production-related impacts dominate all environmental impact categories. However, as the performance of the lithium-air cell develops (and less cells are needed), battery-related losses during operation become the major source of environmental impacts. The battery internal electricity losses become heat that may need considerable amounts of additional energy for its transportation out of the battery. It is recommended that future battery cell development projects already at the design stage consider suitable methods and processes for efficient and environmentally benign cell-level recycling. LCA could provide additional arguments and a quantitative basis for lithium battery recycling. This emphasizes the need to develop LCA toxicity impact methods in order to properly assess lithium.