Motorists may have found some relief at the pumps in recent weeks, but fuel prices remain higher than they were 12 months ago, and even the most eager motorists are reconsidering their purchasing options. And while car dealers might be anxious to get you in an electric vehicle (EV), many buyers have to wait up to nine months for delivery.
Delays are due to post-pandemic supply chain disruption, a global chip shortage and the need to find alternatives to Ukraine for sources of vital parts.
But as the world transitions to electric vehicles, the current challenges are part of a much larger struggle to secure and control the battery supply chain, from mineral extraction to manufacturing.
Today’s global battery arms race is the story of China’s manufacturing dominance and a growing concern for a country that controls the world’s access to vital minerals.
Automakers worldwide rely on China for most of the key components in the world’s EV batteries, and as demand for electric cars grows, that dependency is only increasing. China’s efforts to boost electric car sales have included both improving urban air quality and curbing growing reliance on imported oil.
The impact of intensive promotional efforts means that Chinese EV sales are expected to reach 6 million this year, and more than half of all EVs sold worldwide in 2021 were made in China.
Additionally, more than 70 percent of the rare minerals used in many of today’s leading EV batteries come from China, giving them a crucial role in the production of EVs that are sold worldwide.
And it’s not just access to the raw materials, but also the production of battery cell components, along with 40 percent of the world’s copper, the workhorse of the energy transition, coming out of China.
Key to China’s dominance was CATL — the world’s largest maker of electric vehicle batteries, which supplies more than 30 percent of global demand.
“Made in China 2025” was a national 10-year plan to achieve independence in the key industries of the future.
In order to dominate the global EV market, the Chinese government has allocated large sums of money to research battery technologies and build the refineries needed to produce key minerals.
As global demand for electric vehicles increases, there will likely be shortages of lithium, nickel and cobalt for the remainder of this decade.
Part of the long-term solution to reducing dependence on China lies in recycling critical minerals — and developing new mines that may take a decade or more to become fully operational. Right now, any major battery factory that is built relies, in most cases, on a mining company that is owned or majority-owned by China.
Many of the affected minerals are not only used in electric cars, but are core components for energy storage and supply is essential to achieve climate goals.
Whoever controls these commodities will lead the new economy and set the conditions for a world that relies on renewable energy.
The invasion of Ukraine has highlighted not only how precarious our dependence on fossil fuels is, but also the folly of concentrating control of vital resources in the hands of a country that operates very differently from the rest of the world. And yet we seem destined to repeat the same mistake.
There will be winners and losers in the global energy transition. And while Europe and the US struggle to catch up, countries like Saudi Arabia with inexhaustible finances are keen to shore up their own interests.
They anticipate the demise of oil and invest heavily in manufacturing green technology.
According to Bloomberg, they plan to become an important part of the global EV value chain in the future – and clearly show that electric cars are indeed the new oil.
The battle for this decade is lost, but what the US and Europe do over the next few years will determine whether self-sufficiency is possible in the decades that follow – otherwise we are just trading one dependency for another.
https://www.independent.ie/opinion/comment/arms-race-for-electric-car-batteries-just-the-latest-tale-of-chinas-global-dominion-41941836.html “Arms race” for batteries for electric cars is just the latest story of China’s global dominance