China Expands Dominance in the Lithium-Ion Battery Market
[Asia Economy Reporter Yujin Cho] The United States, which has been continuing its offensive against China in advanced technology fields such as semiconductors, quantum computers, and biotechnology, is reportedly becoming significantly more vulnerable than China in the supply chain of battery raw materials.
On the 25th (local time), the U.S. political media outlet Foreign Policy reported that China is expanding its influence in the lithium-ion battery supply chain commonly used in electric vehicles, smartphones, and laptops, thereby encroaching on the U.S. market.
This strengthening of China's dominance is analyzed as a new flashpoint of geopolitical conflict amid the intensifying strategic competition between the U.S. and China. It is suggested that as China secures 'mineral rights,' which are key raw materials for batteries, a history similar to 20th-century oil-producing countries reclaiming oil rights from great powers is being replayed in the mineral sector.
According to the International Energy Agency, China's production share of key electric vehicle battery materials is absolutely dominant with lithium (58%), nickel (35%), cobalt (65%), and manganese (71%).
Morgan Bazilian, director of the Payne Institute for Public Policy at Colorado School of Mines and former senior energy expert at the World Bank, pointed out, "China is strengthening its dominant role in almost all major mineral supply chains, and the U.S. and China are engaged in a kind of economic war in the battery sector."
Chinese battery companies' pursuit of international expansion across Europe and North America also contributes to strengthening China's dominance.
China's CATL, the world's largest battery manufacturer, established its first overseas production base in Germany and began operations at the end of last year. Having achieved the world's number one position through domestic demand alone, CATL plans to build new production bases starting in Germany and expanding to Hungary and the United States.
This strategy aims to extend beyond the Chinese market, which accounts for half of the global electric vehicle market, to the rapidly growing European and North American markets. With the domestic boom combined with overseas expansion, the combined global market share of China's top two battery companies, CATL and BYD, recently surpassed 50%.
Foreign media also analyze that the shortage and rising prices of raw materials such as nickel and lithium are driving European demand from companies like Volkswagen and Volvo toward cheaper Chinese products, further increasing China's dominance.
Director Bazilian stated, "The expansion of Chinese battery dominance is the result of the Chinese government’s decades-long investment in making minerals and metals, which are core to energy and defense, strategic resources and securing the entire supply chain."
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