Experts indicate that the final impact will depend on the ease with which companies will be able to get licenses – something that “can take some time,” they admit
China has imposed restrictions on the export of essential technologies for the production of batteries to electric vehicles, in an attempt to consolidate its domain in the sector, which contributed to the country’s leadership in the world race to electric vehicles.
Beijing’s government added to the export control list various technologies used to manufacture electric vehicle batteries and process lithium, an essential mineral for batteries.
This means that the transfer of technologies abroad – for example, through trade, investment or technological cooperation – will have to be authorized by the government, which issues a license for this purpose, according to one of the country’s Ministry of Commerce.
The new controls reflect similar restrictions introduced only three months ago on certain rare lands – essential materials used not only in the production of electric vehicles, but also in consumer electronics and military equipment, such as combat planes. China’s dominance in the rare land supply chain has emerged as one of its most powerful weapons in a new trade war with the United States.
China has emerged as one of the main actors in the competitive world market of electric vehicles, in part due to its ability to develop profitable and high performance batteries through its comprehensive supply chain, from raw material processing to the manufacture of batteries.
Several car manufacturers worldwide use Chinese batteries in their electric vehicles. Chinese electric vehicle battery manufacturers represent at least 67% of world market share, according to SNE Research, a market and consulting company company.
Proposed for the first time in January, the latest licensing requirements launched uncertainties on the expansion plans of Chinese electric vehicle manufacturers abroad, especially because markets such as the European Union have applied rates on Chinese car exports to press them to set up in these countries. Many Chinese battery manufacturers also have plans to locate production in markets such as Southeast Asia and the US.
The Ministry of Commerce stated that the restrictions “aim to safeguard national economic security and the interests of development and promote international economic and technological cooperation”.
Liz Lee, director of Counterpoint Research, warns that the change “deepens emerging geopolitical dissociation of technology beyond the materials to process IP (intellectual property)”. According to the official, this could accelerate the efforts of US, EU and others to increase the location of precursor materials and metal refinement capabilities.
BYD electric cars waiting to be charged on the Auto Transporte “Shenzhen” car transportation, which goes to Brazil from Taicang Port in Suzhou, China, April 27, 2025. AFP/Getty Images
The China Catl, the world’s largest electric vehicle battery producer and one of Tesla’s leading suppliers, has factories in Germany and Hungary and plans to open a factory in Spain, as part of a business partnership with Stellantis, owner of Fiat and Chrysler. It is also licensing its technology to be used in a Ford’s electric vehicle battery factory that is under construction at Michigan, USA.
However, the Chinese Giant of BYD electric vehicles, which manufactures its own battery and has surpassed Tesla in sales of 2024 to become the largest electric vehicle manufacturer in the world, has electric vehicle production facilities spread across various countries, from Hungary and Thailand to Brazil.
And Gotion, another major electric vehicle battery manufacturer in China, has plans to build a production unit in Illinois, USA.
Analysts warn that it is not yet known to be sure the real impact of these new export controls, as details are not yet clear.
From Liz Lee’s perspective, the restrictions “seem to aim at process technologies upstream rather than the manufacture of cells and battery modules.”
As CATL factories in Germany and Hungary focus on the production of cells and modules and do not seem to replicate the restricted processes at the local level, the short -term effect may be limited, admits the man’s manner.
For BYD, which only sets up sets of batteries abroad and does not manufacture battery cells abroad, the controls do not seem to affect operations at this stage, adds Liz.
Vincent Sun, Morningstar’s senior stock analyst, which covers China’s electric vehicle sector, says the final impact will depend on the ease with which companies will be able to get licenses – something that “can take some time” to reach a conclusion.
CNN contacted Catl, Byd, Gotion and Ford for unsuccessful comments.
China domain in batteries for electric vehicles
Part of the recently announced restrictions concern cat production technology for the manufacture of iron and lithium (LFP) battery, a type of lithium -ion battery that has become increasingly popular in electric vehicles over the past five years due to its lowest price and higher safety. Another part focuses on processing, refinement and lithium extraction.
A worker from the Chinese electric vehicle company Nio sides in a car during his final inspection at the end of the automated production line at the company’s production center in Hefei, China, on January 17, 2025. Kevin Frayer/Getty Images
China dominates the production of LFP batteries and the transformation of lithium worldwide, according to Fastmarkets, a UK -based research company. Last year, he held 94% of the LFP production capacity market share and provided 70% of the world’s transformed lithium production.
However, although LFP batteries account for 40% of the world’s power output market in terms of capacity, they are more frequent in Chinese manufacturing electric vehicles than in other countries, according to a data analysis and consulting company centered on critical minerals and batteries.
James Edmondson, vice president of Idtechex, an emerging technology investigation company, explains to CNN that, despite the lowest LFP energy density, its much lower cost, compared to the common alternative battery made of nickel, manganese and cobalt, made it “a basic element in low-cost vehicles” and there are plans for greater adoption by UE car manufacturers and USA.
China’s dominance in the production of polyester discontinuous fibers means that, “even in the case of discontinuous polyester fibers produced outside China, Chinese suppliers continue to play an important role in producing precursor precursors polyteter fiber cathodes,” says James Edmondson.
China has a “significant leadership” in the technology itself, as shown by the, which promised a 402 km range with only a five -minute load, adds the head of IDtechex. Technology surpasses Tesla superchargers, which take 15 minutes to reach 321 km.
In order not to stay behind, the CATL presented in April a more competitive product, an improved even higher autonomy, over 500km with the same time of loading.
