China has imposed new export restrictions on key technologies essential for producing electric vehicle (EV) batteries, including lithium processing and lithium iron phosphate (LFP) battery production.
The move is aimed at consolidating China’s dominance in the EV sector and mirrors recent controls on rare earth materials.
The restrictions require companies to obtain licenses to transfer technologies overseas and could complicate expansion plans for Chinese firms like CATL and BYD, although analysts believe the immediate impact will be limited since most overseas operations focus on battery assembly rather than the restricted upstream processes.
With China holding 94% of global LFP production capacity and 70% of processed lithium output, the new controls underscore its strategic leverage in the global EV supply chain.
While Western automakers increasingly adopt LFP batteries for their affordability and safety, they still rely heavily on Chinese technology and precursor materials.
Experts suggest the move could intensify efforts by the US, EU, and others to localise battery manufacturing and reduce dependence on China.
Image credit: Juice
Exploding lithium batteries, big Chinese plot.