As the top nations in world scramble for their own electric vehicle (EV) market share, China is silently capturing the EV battery market, the basic unit, or fuel, on which these green vehicles run. It is scary and evident that China would very soon be using its EV battery dominance as a bargain chip to manipulate other nations, pretty much what the Gulf nations are doing with their fuel, and the world needs to step up tostop the Dragon.
China is secretly monopolizing the EV battery market for its own advantage. As per the list released for the top EV battery manufacturers in the world in 2023, Contemporary Amperex Technology Co. Limited (CATL, China) leads with 36.8% share, BYD (China) has 15.8%, LG (South Korea) has 13.6%, Panasonic (Japan) has 6.4%, and remaining global manufacturers contributes collectively with 27.4% share. This list depicts that the top two battery manufacturers are Chinese companies that has over 52.6% market share. These numbers reflect that China builds battery for every third electric car manufactured in the world.
In this scenario, if the global automakers choose to shift towards EVs completely it will give China immense power. After having such a control over the future fuel of the world China can choke rival countries or drive inflation or use the batteries as a bargaining chip to gain access to prominent technologies and information.
China has been aggressively buying silvery metal Lithium, which is the basic component to build EV batteries. China currently owns 8% of world’s lithium and is busy arranging for the rest.Beijingso far has invested billions to dominate the EV battery market and in last two years it has bought stakes in 20 Lithium mines in Africa and Latin America. This provides for sufficient raw material and for refining purpose China is building multiple battery factories at a rapid pace.
In the last four years while the world has spent $300 billion in battery factories, it is China which has proved its dominance by building 74% of them. China is also giving massive state subsidies to its local players. The big local player CATL has received 2.85 billion yuan ($391 million) in government subsidies for the sixth-month period, a three-fold increase it received last year. China aims to outperform its rivals by supporting local players in order to help them flourish. With such kind of backup even the big US companies such as Tesla and Ford willneed some years to do a catch up with its counterparts such as BYD and CATL. This scenario is a tough spot for global carmakers. EV batteries are in huge demand but China and its supply chain cannot be relied upon.
Currently, many countries have joined the race of EV battery manufacturing. While there are established players from Japan, South Korea, and China, many other countries are taking baby steps in the industry. For example, India has recently invested $24 million in five lithium mines in Argentina and is seeing this as a big opportunity for mining and exploration. While earlier 95% of lithium export was from China and Hongkong, in January this year the Indian government is looking to diversify. This is a clear example how many countries distrust China and are looking for options when it comes to EV battery manufacturing.
Similarly, earlier there was an uproar by US lawmakers over an alliance between American carmaker Ford and China’s CATL to build batteries in Michigan. This led to a 40% reduction in the proposed capacity to build batteries. This proves that global powers are aware that China was playing a long game to make itself indispensable in the EV battery market. Global competition has now risen to the occasion and is making efforts to bring more options on the table.
Experts believe that there is also an urgent need to construct an independent regulatory organization to control EV industry that would legally reduce dependence on Chinese batteries. Beijing obviously will strongly oppose to the idea but eventually has to comply considering the kind of money it has invested in the EV battery manufacturing. This will also give other players in the industry a fair chance to showcase their potential while keeping China and its misuse of power in check. While the coming years would be crucial in EV battery manufacturing market the race for batteries would surely heat up. In this case, China needs to be tamed by creating more alternatives within the EV industry.