Lithium Wars: China Reinforces Grip on EV Supply Chain

China Tightens Grip on Lithium Supply Chain Amid Rising Global Tensions

Editorial Team (ET)May 15, 2025

China, the global leader in lithium production, is tightening its grip on the battery materials market by proposing new export restrictions on cutting-edge technologies. This move signals a growing determination to protect its dominance in the electric vehicle (EV) and energy storage supply chain, amid intensifying trade tensions with the United States.

Beijing’s Strategic Shield for Battery Innovations

China’s Ministry of Commerce recently released a notice seeking public input on proposed controls over technologies used in lithium refining and battery chemical production. These curbs are designed to shield China’s technological advancements, particularly in direct lithium extraction and advanced cathode materials.

“This demonstrates the government's awareness of the strategic importance of safeguarding its advanced lithium technologies,” noted Yu Yakun, an analyst at Cofco Futures Co.

Targeting Key Lithium Processes and Compounds

The proposed restrictions encompass a range of processes critical to producing battery-grade lithium chemicals. These include technologies for manufacturing lithium-iron-phosphate (LFP) cathodes and lithium-iron-manganese-phosphate cathodes—components vital for high-performance batteries.

These developments echo China’s earlier decision to impose export controls on rare earth metals, signaling a consistent strategy to keep its technological expertise under wraps.

Ripple Effects Across Global Battery Supply Chains

The potential export restrictions have left battery manufacturers across Asia and beyond scrambling to assess their impact. While existing projects might remain unaffected, future investments, especially joint ventures with foreign companies, could face significant hurdles.

Peng Xu, an analyst at BloombergNEF, explained, “Current operations may escape these controls, but new investments involving advanced technologies will likely encounter stricter scrutiny.”

A Broader Tit-for-Tat in Tech and Minerals

This isn’t the first time China has wielded its dominance in critical minerals as a geopolitical tool. In recent months, it has banned exports of materials like gallium, germanium, and graphite, retaliating against the U.S. government’s heightened tech restrictions.

Washington and its allies have grown increasingly alarmed over Beijing’s monopoly on essential resources. As global demand for EVs surges, securing alternative lithium sources has become a top priority for Western nations.

A High-Stakes Global Power Play

China’s latest move reflects the high stakes in the ongoing battle for technological supremacy. By controlling access to its advanced lithium processes, Beijing is not only safeguarding its economic future but also reinforcing its influence over the EV revolution.

As the public weighs in on these proposals, the world watches closely, recognizing that the future of energy innovation hangs in the balance.

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