China to Restrict Exports of Lithium Battery Technologies
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A worker assembles new batteries for power banks in Wuhan, China. Photo: Bloomberg
China is considering restricting the export of technologies used in the production of lithium-ion batteries, a critical component in the global push for electric vehicles (EVs) and the clean energy transition.
The Ministry of Commerce Thursday proposed adding the technology used to make battery cathodes, as well as methods to extract and process lithium, to its list of controlled exports.
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- China is considering restricting exports of technologies for lithium-ion battery production, including cathode manufacturing and lithium processing, as well as gallium extraction, which are vital for EVs and semiconductors.
- These proposed measures could reinforce China's dominance in the global lithium battery supply chain, impacting markets as foreign companies seek to develop similar technologies.
- A McKinsey study projects a rise in global lithium-ion battery demand, from 700 gigawatt hours in 2022 to 4,700 in 2030, highlighting the significance of these technologies.
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Who’s Who
- McKinsey
- The article references a 2023 study by McKinsey, which predicts that global demand for lithium-ion batteries will increase significantly, growing from about 700 gigawatt hours in 2022 to around 4,700 by 2030.
- LG Energy Solutions
- LG Energy Solutions, a South Korean company, plans to start large-scale production of lithium iron phosphate batteries in 2025. They are exploring this route as China dominates the production of these batteries, which have gained cost advantage and significant market share in China. Despite their delayed entry, LG Energy Solutions is positioning itself to enter the market amid growing global demand for lithium-ion batteries driven by the expanding electric vehicle market.
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What Happened When
- Since 2020：
- The EV market rapidly expanded and raw material prices increased, enabling lithium iron phosphate technology to capture 67.3% of China's battery market by 2023.
- By 2023：
- Lithium iron phosphate technology captured 67.3% of China's battery market.
- Last month (as of the article date)：
- China banned the export to the U.S. of various critical materials used in semiconductor production, including gallium and germanium.
- Thursday (relative to the article date)：
- China's Ministry of Commerce added 28 U.S. defense contractors to its export control list.
- Feb. 1, 2025：
- Deadline for public comments on China's proposed technology export restrictions.
- In 2025：
- South Korea's LG Energy Solutions plans to start large-scale production of lithium iron phosphate batteries.
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