China has become a global leader in lithium-ion battery production. Six of the world’s top 10 battery manufacturing companies are headquartered in the country.
China accounted for 77% of the world’s total battery manufacturing capacity in 2022. Poland and the United States each produced just 6% of the world’s capacity. That same year, the U.S. paid out more than $9 billion for Chinese batteries, two thirds of the total money spent on imports of this technology during that timeframe.
China currently controls 60% to 100% of the mining or refining for the minerals needed to make these batteries. Because of the stranglehold Beijing holds over their production, experts believe the U.S. is “10 to 20 years behind Asia in commercialization of battery technology.”
China has bet beg on the lithium-ion battery market. Some experts have predicted demand will increase sevenfold by 2035. Fueling those estimates is the growing worldwide adoption of electric vehicles.
“When we’re talking about battery technology, battery technology is really a derived demand that is responding to the demand level for electric vehicles,” John Quelch, a former associate in research at Harvard’s Fairbank Center for Chinese Studies and fellow of the Harvard China Fund, told Straight Arrow News.
Lithium-ion technology powers EVs, and some reports have forecasted EVs could reach 86 percent of global vehicle sales by 2030. In addition to China dominating the battery sector, the country has been spearheading the global EV transition. The nation further charged up its world-leading electric vehicle sales numbers after rolling out a $72 billion package of tax breaks for the industry over the summer.
“The Chinese have been very aggressive in motivating the purchase of electric vehicles, which represent a much higher percentage of new vehicle sales in China than they do in the United States,” Quelch said.
During the first half of this year, 55% of all electric vehicle sales occurred in China. That figure also represented 31% of all light vehicle sales in the nation over that time. Comparatively, the U.S. was responsible for just 13% of global EV sales, with that figure making up a little over 7% of all domestic new car sales.
As a result, members of Congress have urged the Energy Department to boost U.S. lithium battery production, or face getting left in the dust by China amid an anticipated EV driven future.
