Energy Insider: China to Restrict Export of Lithium Battery Tech, Tesla Opens New Shanghai Battery Plant

This week, Caixin's energy wrap highlights significant developments in China's climate and energy sectors, focusing on policy, industry advancements, and strategic projects. Key stories include China's potential export restrictions on battery technologies, Tesla's new battery factory in Shanghai, the growth of new-energy vehicles (NEVs) market share in China, and Envision Energy's success in wind power bids [para. 1].

China is considering implementing restrictions on the export of specific technologies vital for lithium-ion battery production. These technologies are central to electric vehicles (EVs) and are crucial for the global transition to clean energy [para. 3]. The Ministry of Commerce (MOC) announced on January 2nd that it might add certain technologies like those for making lithium iron phosphate and lithium manganese iron phosphate cathodes to its list of controlled exports. Although China dominates these areas globally, the proposed restrictions intend to limit the export of technologies, not products. The move could bolster China's control in the global lithium battery supply chain, although it is expected to have minimal impact on international collaboration since these technologies are still under development and have not been extensively deployed [para. 5][para. 7].

Tesla has launched its new battery factory in Shanghai after a swift construction period of seven months [para. 9]. Located in Lin-gang Special Area, a free trade zone, the factory passed completion inspection on December 27th and is poised to begin mass production shortly. The facility produces Tesla’s Megapacks, battery storage units, and marks Tesla's first battery plant outside the U.S. Tesla plans to manufacture 10,000 Megapacks annually, equating to a storage capacity of nearly 40 gigawatt-hours, for the global market [para. 11]. This venture underscores China's growing significance as Tesla's major market and production hub, with China represented as a standout performer amid declining global sales by selling a record 657,000 cars in the country last year. Since the inauguration of its Shanghai Gigafactory in December 2019, Tesla has output over 3 million EVs, exporting 1 million vehicles by the end of September [para. 13].

Regarding NEVs, it's projected that over 55% of vehicles sold in China by 2025 will be new-energy vehicles [para. 15]. This projection comes from a report by China EV100's general-secretary Zhang Yongwei, who predicts that 15 million out of the forecasted 26 million vehicles sold in China this year will be NEVs. With anticipated growth in plug-in hybrids and range-extended vehicles, the sales of NEVs made in China may reach 16.5 million by 2025, a 30% increase from 2024 [para. 17]. This accelerated growth trajectory may enable China to reach the goal of NEVs constituting over 50% of vehicle sales a decade ahead of schedule [para. 19].

Envision Energy Co. Ltd., based in Shanghai, outperformed its competitors in securing wind turbine bids both domestically and internationally in 2024. The company won orders amounting to 38.6 gigawatts (GW) in capacity, representing 17.5% of the total from all assessed companies [para. 21]. With China's wind turbine production capacity being the largest worldwide, Envision’s success highlights the country's substantial capabilities in this sector, with significant shares in manufacturing blades, gearboxes, and generators globally. Chinese manufacturers, including Envision, occupied four of the top five positions among global wind-turbine producers in 2023 [para. 23][para. 25].