China's Dominance in Electric Vehicle Battery Manufacturing

China's Growing Influence in the Global Battery Market

The Chinese government has taken significant steps to bolster its position in the global battery market, with a focus on cathode battery recycling and the acquisition of critical element mines.

In October 2021, the Chinese government increased tax credits for cathode battery recycling from 30% to 50%, a move that could potentially stimulate further growth in the battery recycling industry. This decision follows the global surge in the prices of cobalt and lithium carbonate, with prices climbing by more than 30% and nearly doubling, respectively, in October 2021.

Chinese corporations, such as CATL and Tianqi Lithium, have been actively acquiring mines in various nations to secure critical elements. These corporations have also made substantial investments in research and development (R&D), with CATL planning to invest an additional $440 million to establish smart manufacturing and R&D facilities for battery and smart technology development.

The Chinese government's actions demonstrate a commitment to fostering growth and innovation in the battery technology sector. In 2021, the companies that made the largest investments in R&D for battery and smart technology development in China were primarily leading electric vehicle manufacturers and technology firms, including BYD, CATL, and other major Chinese battery producers. These firms have committed substantial resources to innovation in battery technology and smart systems to support China's push in electric mobility and smart technologies.

Moreover, the Chinese government's enticing policies and incentives have secured the attention and interest of global players in the battery technology industry. Western corporations, such as Tesla and Volkswagen, have made significant investments in battery production in China. The Tesla Gigafactory is located in Shanghai, and Volkswagen has stakes in battery producers Guoxuan High-Tech Co. and JAC Motors.

Chinese enterprises have gained total control over the supply chain for these critical elements. Companies like CATL and Tianqi Lithium are among the largest buyers of lithium mines and refine approximately two-thirds of the world's lithium supply. The Tsingshan Holding Group of China manages the world's biggest nickel syndicate in Indonesia.

The Chinese government's policies have made battery recycling more appealing, and the country's influence in the global battery market continues to expand. This growth is evident in the acquisition of mines and the increased investments in R&D by both Chinese and Western corporations. As China continues to innovate and invest in battery technology, it is poised to play a crucial role in shaping the future of the global battery industry.

China's Dominance in Electric Vehicle Battery Manufacturing