China is planning to restrict the export of technology crucial for the global electric vehicle (EV) industry, as tensions with the US continue to rise. The proposed measures include adding battery cathode technology to the list of controlled exports, along with restrictions on technology related to lithium and gallium production.
If approved, these new controls would further solidify China's dominance in critical materials and technologies essential for manufacturing semiconductors and EV batteries. The move comes amidst a tech rivalry with the US, with China aiming to implement fair and non-discriminatory export control measures.
China's recent ban on the sale of materials vital for semiconductor production to the US was a response to US export controls on Chinese-made semiconductors. The latest proposal could be seen as a strategic move to strengthen China's position in the battery ecosystem, particularly in the EV battery supply chain.
China currently leads the global industry in materials like gallium and lithium, which are integral to various technologies including mobile phones, satellite communication, and EV batteries. The proposed export controls would help China maintain its market share in lithium processing and secure its domestic battery supply chains.
As global demand for lithium-ion batteries continues to rise, any restrictions on lithium extraction technology could have significant implications, especially as the world moves towards electric vehicles. The International Energy Agency predicts that only 50% of lithium demand will be met by 2035.
With the demand for lithium-ion batteries expected to surge in the next decade, Chinese policymakers will need to carefully consider the impact of any restrictions on the global ambitions of Chinese EV and battery manufacturers. This move could potentially lead to retaliatory actions from Western countries.
In a separate development, the Commerce Ministry of China added 28 US companies, including major defense contractors, to its export control list for the first time. This list regulates the sale of dual-use technology and mirrors the US Commerce Department's 'Entity List,' introduced in November.
