Guide to Buying EV
China's EV Battery Production Capacity May Not Be Enough - Experts Say
China's EV Battery Production Capacity May Not Be Enough - Experts Say
China now has more than a quarter of the world's production capacity for batteries, the key component in electric vehicles.china ev battery production That gives it a huge advantage over competitors, including the US and European automakers who want to abandon gas cars for electric models. But it won't be easy to challenge China, experts say.
The country dominates the raw materials needed to make batteries and controls most of the processing and refining capacity.china ev battery production It mines more than two-thirds of the world's graphite, extracts 60 percent of its cobalt, and controls almost half of its lithium supply. And the Chinese companies that control those assets are pursuing a long-term strategy to ensure cheap, steady supplies. They've bought stakes in mining companies on five continents and have established a monopoly in the Congo, where China has acquired the largest share of the cobalt output. That will allow the Chinese companies to control price and demand, according to Cullen Hendrix, a researcher at the Peterson Institute for International Economics.
In addition to controlling the critical raw materials, Chinese battery makers are developing advanced technology that could help them expand overseas.china ev battery production The company that made the battery for Nio's new car, for example, claims to have developed a solid-state version that can store more energy in the same package and deliver more miles per charge. That may boost the sales prospects for electric vehicles in countries that have stricter emissions standards than China.
But even with its dominant position, China has vulnerabilities.china ev battery production For one, it's behind the pack in environmental, social and governance metrics, ranking 17th out of the 28 industrialised countries surveyed by the consulting firm BNEF. Norway and Sweden lead the way in ESG, while Canada jumped into sixth place thanks to stronger ESG regulations and its hydropower-rich electricity mix.
The other big problem for China is that it's already producing more EV batteries than it needs.china ev battery production That's why some Chinese suppliers are establishing plants abroad, aiming to serve local demand and comply with stringent emission requirements in markets like the US and Europe. Others are focusing on technology innovation to give them a competitive edge.
For example, Gotion High-Tech has a battery that it says can power an EV for 1,000 kilometers on a single charge. The company says its offering, which uses lithium-iron-manganese-phosphate (LFP) chemistry, provides an upgrade in energy density compared to the nickel-cobalt batteries that are used by most major EV manufacturers, including BYD and Tesla. The higher efficiency means that the batteries can be built smaller and lighter for better performance. That should help reduce costs, the company says. If it can bring the price down to a point where it competes with more conventional cars, that'll boost the sales of EVs in countries like the United States. It's an important step for a technology that is poised to transform the global transportation industry.
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