Beijing imposes sweeping export controls across lithium-ion battery production chain
As part of Thursday's expansive package of export controls, Beijing slapped export licensing restrictions on most of its lithium-ion battery production chain, including:
- High-energy-density lithium-ion battery cells and packs
- Most high-value cathodes (including LFP, NCM, and NCA)
- Anode materials
- A huge range of related production equipment
The only major segment we don't see covered is electrolytes, like lithium hexafluorophosphate.
Talk about a step-change: In July, Beijing introduced export licensing requirements for certain cathode-production technologies — a narrowly targeted move to protect China’s edge in advanced battery materials.
- The new controls, by contrast, give Beijing sway over most of China's high-value battery-related exports – and raise serious questions about the future of cross-border partnerships, such as the Ford-CATL licensing tie-up.
Silver lining: At least legacy consumer electronics and – checks notes – power tools escape largely unscathed, as the LCO, LMO, and lower-performance LFP batteries they use most aren't listed.
- Newer models, however, increasingly use batteries that are.
Get smart: The move flips the script on the US.
- The US has been pondering, "Should we allow Chinese batteries into the US?"
- Now, the question is, "Will China let us have Chinese batteries?"
Get smarter: China is desperate to ramp up battery exports to counteract brutal domestic competition – but these new restrictions tug in the opposite direction.
- That said, the US is a minor battery market for China, so Beijing can wield the stick with limited opportunity cost.