China puts export restrictions on 8 key EV battery technologies

China has imposed export restrictions on eight key EV battery technologies as the country seeks to consolidate its dominance in the global EV race.

The move makes it harder for Chinese automakers to set up factories overseas. Any overseas transfer of these technologies through trade, investment or technological cooperation will henceforth require a prior license from the Chinese government, the Ministry of Commerce said in a statement, according to The New York Times.

“This is an adjustment to the existing restricted technologies based on the development and changes of technology,” China’s Commerce ministry said, without giving any further details.

Restrictions are being applied to three technologies used to make intermediate substances needed for battery cathodes — including those used to produce lithium iron phosphate (LFP), lithium manganese iron phosphate (LMFP) — and five technologies related to lithium extraction and processing, according to the South China Morning Post (SCMP).

China holds over 95% of global production capacity for key materials like LFP and LMFP, according to Liu Yanlong, former secretary general of the China Industrial Association of Power Sources, the SCMP report said. Chinese EV battery makers have a whopping 67% of the global market share, according to SNE Research. 

While the EU has been urging Chinese automakers and battery manufacturers to set up operations in the bloc — seeking to tie it to the continued growth of Chinese car sales in the bloc — the United States has been more cautious in inviting Chinese investment.

The new restrictions put in place by China are similar to controls it introduced three months ago on rare earth elements and their magnets, which are critical for EV production as well as consumer electronics and military equipment, according to a report by CNN.