China is, to the electric car, the child who arrives with the ball after having a snack. He is, in fact, the boy who has the ball, a regulation soccer field at home and lets in whoever he wants when he wants the most.
Or that’s what we might think if we take into account its leadership in the supply chain, access to rare earths and battery production. The last step is to maintain greater control over lithium and, in the future, solid-state batteries.
But to what extent is it true?
The latest. A few days ago, China announced important changes when it comes to its exports. Among them, he confirmed that he was going to monitor the licenses that allow the export of vehicleswhich was understood as a way to prevent manufacturers without experience or infrastructure in the destinations from selling cars that they later cannot service.
In the same way, has announced restrictions to the export of rare earths. My colleague Javi Márquez explained that “the country will be able to decide what is exported, to whom and for what purposes, under national security criteria. Applications for military purposes will bein principle, denied, while those related to semiconductors or artificial intelligence will be examined on a case-by-case basis.
The last movement is related to the exports of batteries for electric cars and the music points to a similar melody. Starting November 8, licenses will be issued to export lithium batteries and graphite anode material compounds. Once again, it points to issues of national security and response to protectionist policies in USA and Europe.
No batteries or equipment. With these new licenses, China will control both the finished product that is intended to be exported abroad and the equipment necessary to produce these compounds outside its borders. In summary, the following is controlled:
- Lithium batteries, cells and battery packs with a density greater than 300 Wh/kg.
- The equipment and technology to produce the above items.
- Iron phosphate and lithium needed to produce cathode materials. Also nickel-cobalt-manganese hydroxide and nickel-cobalt-aluminum hydroxide and lithium-rich manganese-based cathode materials.
- The equipment to produce all these compounds.
- Graphite anode materials
- The equipment necessary to produce them.
The reaction? Numerous experts They have emphasized that these new licenses have the true objective of reducing and limiting exports to stop the advance of Chinese competitors in the electric car industry.
Investors have understood the same and in Reuters They reflected the consequent fall in the stock market of giant battery producers such as CATL but also of vehicle manufacturers such as BYD. In South China Morning Post They also mentioned China’s intention to maintain its leadership in the electric car market.
Putting the magnifying glass. But is it true that China is doing everything it can to torpedo its rivals? According to the International Energy AgencyChina manufactures three out of every four batteries for electric cars. However, the limitation of a density greater than 300 Wh/kg is not coincidental.
Walter Zhang, senior analyst at Fastmarkets, points out that batteries for electric cars are really not in danger. “The policy ensures that the export and sales of NCM (230-280 Wh per kg) and LFP (160-210 Wh per kg) batteries for electric car application are not affected,” explains in this article.
And he points to another point of view: “the measures may be more aimed at restricting smaller companies from entering into technology exchange agreements with Western partners.” Module and pack production equipment is not under this new regulation either, so It won’t impact that much either. in production abroad.
So? If the majority of electric car batteries are not affected, what is the point of these restrictions? Everything indicates that there are two ultimate intentions when it comes to lifting this tighter control over the batteries.
The first is to increase control over the export of batteries that can be used in military vehicles. In an increasingly tense international context, the State is guaranteed to have greater knowledge of who wants and can export but also in what quantities and for whom.
The second thing is that as investments in research bear fruit, the next step should be the production of denser batteries. Batteries that would store more energy in less space. And there, the solid state batteries they are projecting themselves as the great leap in quality in the electric car market.
Solid State Batteries. Solid-state batteries promise to be the definitive big leap for the electric car. With them, the manufacturers claim, an electric car will be able to travel more than 1,000 kilometers between recharges. They are also more powerful, safer and will suffer less degradation caused by charging cycles.
Nothing sounds bad except that producing them is, at the moment, extremely expensive. Both companies and Toyota has already been lowering its expectations pointing out that it will be a type of compound that can only be included in vehicles with a very high price range.
Again, ahead. And although Toyota says it has made progress in these compounds, Nissan has been researching them for years and Mercedes says it already has one (which obviously cannot scale) it seems that Chinese manufacturers once again have the lead.
MG assures be very close to mass producing them. BYD too ensures that it can put them on the market in the short term. And beyond the promises, NIO has demonstrated that its semi-solid state battery (a previous step before reaching these energy accumulators) can travel a thousand kilometers without stopping to recharge.
China controls the supply chain of the materials to produce these batteries but also the equipment that can produce these compounds. It seems that the measure is aimed at putting obstacles in the way of mass production of an innovation that can change the automobile market.
free way. As we have seen, control over exports opens the door to selling current batteries for electric cars outside the country. It makes sense, now that Chinese companies like CATL have reached agreements with giants like Stellantis. But it also makes it easier for those who settle in European territory (BYD either XPengto give some examples) can receive batteries manufactured in China or produce in Europe with Chinese equipment and technology.
The latter is essential because the Chinese automobile market wants to continue growing. In recent months it has begun to give some exhaustion symptoms and need increase your exports so as not to saturate a market where the Chinese buyer’s own idiosyncrasy complicates endless growth in vehicle sales no matter how large the country is.
Photo | CATL
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