Why China Is Working Hard To Control The Resources Used To Make Batteries For Electric Cars? An Ultimate Guide 2024

China is working hard to control the resources used to make batteries. Do you know why taking control over resources used to make the electric car batteries is the priority to the china?

China, the world’s second-largest economy, trying hard to control the resources used to make batteries for electric cars because it owns and controls the largest lithium, cobalt, nickel, and graphite reserves worldwide, more than any other country. And it is fact that resources are more in control of china than the U.S. or other countries. These are the resources used in lithium-ion battery production.

Country	Lithium Mining	Battery cell Capacity	Battery component Manufactoring
China	Controls 60%	Controls 77%	Controls 60%

Share of china

Here we explore various factors, facts, and estimations that clearly explain why china is trying to control resources for electric car batteries.

The global demand for Electric cars and vehicles is rising. U.S.-based company Tesla is the leader in the Electric car market. China is the biggest market for Electric Vehicles in the world. As the topmost company of electric vehicles in the world is from the U.S. then why the world is talking about china?

The world’s topmost EV battery company is CATL (Contemporary Amperex Technology Co.). And this is the chinese company. While the west focus on the production of EVs, china is trying to get control over the resources needed for electric car batteries.

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How China Controls Resources used to make Batteries?

The rising demand for electric vehicles, made the companies to produce more and more EVs. In future, many countries are going to make laws for EVs in order to deal with climate change.

The various conferences worldwide are focusing on more and more use of EVs. The electric car companies have already forecasted it and trying to increase their production, by developing charging stations. But the thing that is making a hurdle is Battery. China is working hard to control the resources used to make batteries.

Now, most electric cars are equipped with lithium-ion batteries. This makes the cars expensive. Because lithium-ion batteries require rare metals such as cobalt, lithium, nickel, and graphite.

Also these metals need to be processed through the supply chain in order to make EV batteries. The demand is very high but the supply is less.

In this, china has identified an opportunity. The player who will control these resources can actually control the whole EV market. China from so early has invested in these resources and today competitors are far away from china in the case of resources used for electric car batteries.

And china can decide the whole economy of the EV market if it captures these resources. Other countries are also trying the same thing. Anyhow china wants to win this “Battery arms race”. That’s why China is working hard to control the resources used to make batteries

China controls 60% of the world’s lithium mining, 77% of battery cell capacity, and 60% of battery component manufacturing, Says The conversation. As the world is focusing on electric cars, china concentrates on batteries more. More than the batteries it is trying to gain a large share of resources used for the batteries.

How China Controls the Resources Used to Make Batteries for Electric Cars and the Supply Chain?

According to a research firm for the Lithium-ion Battery industry, Chinese chemical companies Contributed 80% of the world’s total output of raw materials for advanced batteries in 2019. This includes the electric Car batteries too.

Regions with the most reserves of resources used in the battery of electric cars and their percentage as compared to the world.

Raw material	The region with the most reserves	Amount of reserves as compared to total world
Lithium	Chile, South America	41.82%
Cobalt	Democratic Republic of Congo (DRC)	70%
Nickel	Indonesia	22%
Graphite	China	60%

Regions with the most reserves of resources used in the battery of electric cars

Lithium

Lithium is a core component of almost 99% of electric vehicles, says an expert in a CNBC interview. Most electric batteries are lithium-ion batteries. Lithium is a rare earth metal and it’s pretty expensive. The whole EV market demand for lithium is high, and the resources are less. In this case, those players who control lithium resources indirectly or directly influence the EV market. And China is doing that.

Here are some facts to support this statement.

Mineral Commodity Summaries 2022 report data suggest that China is among the top 5 countries in the world with the most lithium resources. And China is trying to buy stakes in South America and Australia, where most lithium resources are found according to report.

The Chile has most lithium resources in the world. Where the Chinese company Tianqui Lithium, has paid $4 billion in order to become the second largest shareholder in Sociedad Química y Minera, the largest lithium producer in Chile.

The same Chinese company owns 51% of Australia’s Greenbushes lithium mine, which is the world’s largest lithium reserve, An article says.

Ganfeng Lithium, a company from china has a long-term agreement to underwrite all lithium raw materials produced by Australia’s Mount Marion Mine. Mount Marion Mine is the world’s second-biggest, lithium reserve.

Country	Lithium Resource	Extraordinary Activity
Chile	Most Resource of Lithium
China	Paid $4 billion to become the second largest shareholder in Chile Company	Owns 51% of Australia’s Greenbushes lithium mine

country with lithium resource

China has control over the world’s largest lithium reserves and has a big market share in that. Like china, Western countries like the U.S. have limited their own Lithium resources and focused more on imports in that case.

While lithium is mined from South America, from countries like Bolivia, Chile, and Argentina. China has a better hold over the Lithium resources in South America, Australia, and other world’s biggest reserves. China has its own resources of lithium as well as has control of the other parts of the world.

Emily de La Bruyère, the co-founder of Horizon, says that “China has a large market share in lithium and other rare minerals which can have an outsized impact on pricing.”

Cobalt

Now coming to another rare mineral, which is used in electric vehicle batteries, Cobalt. China Has only 1% of the reserves of cobalt in the world. Still, it affects 80 % of the cobalt refining industry. Africa, the Democratic Republic of Congo (DRC) produces 60% of the world’s mined cobalt.

Now surprisingly, According to a Working paper published by Organisation for Economic Development (OECD), eight out of 14 largest cobalt mines in the DRC are by Chinese owners. These Eight mines contribute about half of the country’s output.

China’s influence can affect about 80 percent of the cobalt refining industry. In cobalt refining, there is battery-grade chemical production from it, called mid-stream chemical refining. According to Benchmark Minerals.

Recently, a Chinese mining firm, China Molybdenum Company (CMOC), announced an investment of $2.5bn in Tenke Fungurume Mine, which is one of the largest mines in DRC, for doubling the cobalt and copper production in it.

The company purchased a 95% stake in the Kisanfu copper and cobalt mine for $550m.

Chinese Company	Investment	Extra Info.
China Molybdenum Company (CMOC)	$2.5 Billion	$2.5bn in Tenke Fungurume Mine
China Molybdenum Company (CMOC)	95% stake in Kisanfu copper
China Molybdenum Company (CMOC)	cobalt mine for $550m

companies and their investment

This is how china is investing and spending billions of dollars for control over the rare metals and resources used in the electric car batteries. This shows China is working hard to control the resources used to make batteries.

Graphite

Lithium-ion batteries are used in electric vehicles. Other than Cobalt & Lithium, graphite is also contributing factor in the production of lithium-ion batteries for electric vehicles.

U.S. government research states that China produced more than 60% of the world’s graphite, in 2019. This is in turn indicates, china can set the prices for the world.

The Experts, say that “It will take 20-30 years for the U.S. to catch up with china and it is dangerous if the world depends on one country to provide raw materials.”

Nickel

Across the controversies and legal risks in the Congo DRC, the Chinese companies are looking way forward to controlling the nickel reserves too. The Chinese giants in cobalt production, at DRC, have increased their investment in nickel processing and extraction, in Indonesia. Indonesia has the world’s largest nickel reserves. So China has already become the largest global market producer of nickel. Says The Guardian Story.

Supply chain

Here is data from Benchmark Minerals, which clearly shows to which extent china is controlling the whole supply chain of the electric car batteries and not only resources.

How much does China Control the Supply Chain of EV Batteries?

Stage of Lithium-ion Battery supply chain	China’s Dominance (%)
Upstream Mining	23%
Mid Stream (Chemical Refining)	80%
Mid Stream (Cathode & Anodes)	66%
Downstream	73%

China’s Dominance (%) IN Stage of Lithium-ion Battery supply chain

The Supply chain involves Mining, refining, Downstream, and upstream processes. In the case of electric car batteries, china can set the prices for the raw materials and can control the electric car batteries’ supply chains also. That’s huge.

Is China Involved in Any Political Agenda Behind Controlling Resources to make Batteries?

The China and U.S. both want to win the “Battery arm race”. China is working hard to control the resources used to make batteries. The soft and cold war between both countries is not hidden. The U.S. and China, the world’s biggest economies trying to surpass each other. Both countries are not aligned with each other in action.

We can understand by recent example, where Biden seems to be on the side of Ukraine, While China supports Russia. The American member reaches Taiwan, while china believes in one china policy. The political difference in both countries reflects in their economic actions too.

What is Battery Arm Race in EV?

The battery arms race is the term used for lithium-ion battery Mega-Factories. The china and U.S. continue to compete against each other in the EV sector. The other countries and China have a strong trade war for capturing the EV battery market.

China is trying to control the resources for the production of EV batteries, while the U.S. trying to do the same with alternative strategies. This competition to capture the EV battery market is called a battery arms race.

China is working on A Million-Mile Battery for Electric Vehicles.

CATL (Contemporary Amperex Technology Co.), a Chinese battery company, claims to be working on a million-mile battery that will last for 16 years and 2 million kilometers (1.24 miles), in an interview given by CEO Zen to Bloomberg.

This battery would cost 10 % more than currently used battery packs in electric vehicles, He mentioned.

CATL is working with tesla in shanghai only, otherwise, tesla is using the Panasonic and LG batteries. The Tesla and GM both are working for batteries but none of them declared about a million miles of battery.

Why does CATL, a China Based Company, Dominates the Electric Car Battery Market?

CATL is the world’s top EV battery company. The company has been founded in 2011. In just a few years the company made it to the top. The company got Subsidies and incentives at the time of its rise.

It is said that the CATL is part of China’s master plan to dominate the EV sector. China is working hard to control the resources used to make batteries. The former executive of G.M. says that “CATL seems like it’s the concept and creation of a master plan.” The company works with all EV manufacturers like BMW, GM, and Toyota. While Tesla depends on CATL in shanghai only, elsewhere it uses Panasonic.

FAQs

Why is China Dominating Lithium-ion Battery Production?

China is dominating lithium-ion battery production because it owns and controls the largest lithium, cobalt, nickel, and graphite reserves worldwide, more than any other country. These are the resources used in lithium-ion battery production, Also it controls the supply chain of lithium-ion batteries.

Is China Leading the World’s EV Battery Arms Race

China seems to be dominating the world’s EV battery arms race. Chinese companies are controlling most of the mining, battery, and manufacturing sectors. But competition is still there.

What is a Million-Mile Battery?

A million-mile battery will last for 16 years and 1.24 million miles, as per the CATL. Recently in an interview given to Bloomberg, the CEO of CATL mentioned that they are working on a million-mile battery.

Where does China Stand in Lithium Production?

China is among the top 5 countries with the most lithium reserves, according to USGS 2022 report.

Why China is working hard to control the resources used to make batteries for electric cars? An ultimate guide 2024