BUSINESS

China’s EV-Battery Makers Get Only Temporary Relief From U.S. Tariff Truce

Published: May. 21, 2025 7:41 p.m. GMT+8

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The tariff deal between Beijing and Washington is offering some respite to Chinese EV-battery exporters as they contend with overcapacity and weak demand at home. Photo: AI generated

The tariff truce between Beijing and Washington is offering some respite for Chinese manufacturers of electric-vehicle (EV) batteries as they contend with weak demand at home and overcapacity. However, the reprieve may not be enough to reverse the slump in prices for the battery metal, which has hit miners and suppliers hard and left many companies who bought stock when costs were high facing losses.

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The U.S.–China 90-day tariff truce reduced duties on Chinese EV and energy storage batteries, offering temporary relief for Chinese exporters but unlikely to reverse persistently low lithium prices.
China supplied 57% of U.S. energy storage battery imports (worth $6.27 billion in 2024), but oversupply and weak EV demand continue to depress lithium prices and battery market sentiment.
Lithium carbonate spot prices have dropped over 80% from their 2022 peak, and analysts expect oversupply and low prices to persist through 2025.

AI generated, for reference only

Who’s Who

BYD Co. Ltd.: BYD Co. Ltd. is a Chinese electric vehicle (EV) giant mentioned in the article as having scrapped plans to build battery material plants in Chile. The decision was prompted by plunging lithium prices, reflecting the challenges faced by the industry amid volatile global lithium markets and weak demand for EV batteries.

Tsingshan Holding Group Co. Ltd.: Tsingshan Holding Group Co. Ltd. is a stainless steel producer from China. According to the article, Tsingshan, along with BYD Co. Ltd., canceled plans to build battery material plants in Chile due to plunging lithium prices. This decision, announced by Chile’s state development agency Corfo, highlights the impact of volatile lithium markets on investment decisions within the battery supply chain.

Hithink RoyalFlush Information Network Co. Ltd.: According to the article, Hithink RoyalFlush Information Network Co. Ltd. is cited as a source for commodity price data, including the spot price of battery-grade lithium carbonate. The company referenced 100ppi.com, a commodity data provider, to report that lithium carbonate prices fell to less than 62,000 yuan per ton, the lowest level since mid-January 2021.

Dongxing Securities Co. Ltd.: According to the article, Dongxing Securities Co. Ltd. reported that in 2024, China’s energy storage battery exports to the U.S. reached $6.27 billion, accounting for 57% of the U.S. imports in this category.

CSC Financial Co. Ltd.: CSC Financial Co. Ltd. is cited in the article as an analyst source, indicating that they monitor and provide insights on China's electric vehicle market. According to their analysts, growth pressure on EV demand in China has intensified in May, heightening the likelihood that full-year demand for EVs will fall short of expectations.

Yingda Securities Co. Ltd.: According to the article, Yingda Securities Co. Ltd. noted that neither lithium salt producers nor upstream miners have implemented significant production cuts to change the supply-demand dynamics for lithium carbonate. As a result, the short-term market imbalance is likely to persist, and overall market sentiment remains pessimistic.

Chaos Ternary Futures Co. Ltd.: Chaos Ternary Futures Co. Ltd. is a firm that provides market analysis. According to a report from March cited in the article, their analysts predict that persistent oversupply will dominate the lithium salt market through 2025, keeping prices low. They also note that most lithium resource projects remain profitable at current prices and expect more lithium carbonate capacity to be added in 2025 to 2026.

Minmetals Futures Co. Ltd.: According to the article, Minmetals Futures Co. Ltd. published a report on April 8, which highlighted that U.S. self-sufficiency for lithium batteries is relatively low, and especially poor for energy storage batteries—estimating that the U.S. can supply only about 20% of its domestic requirements for such batteries.

AI generated, for reference only