More than half of the world production of traction batteries is provided by only two Chinese companies – CATL and BYD, and only six places belong to the top ten manufacturers from China. Benchmark Minerals estimates that China itself will produce twice as many batteries as all other countries combined by 2030, and no one will be able to shake its lead.
Chinese suppliers as explained The New York Times, control 41% of the world market for cobalt and 28% of the world market for lithium, with most of the raw materials entering China from other countries. Chinese companies are shareholders in many mining companies on the five continents of our planet. Congo is the largest cobalt producer and Chinese investors have already bought most of the deposits in the country. For graphite, China controls 78% of the world market and mines it domestically at relatively low cost, for manganese and nickel it is 5% and 6% respectively. Deals by Chinese investors with partners in Indonesia will make China the world’s largest player in the nickel supply market by 2027.
The peculiarities of the mining industry are now also playing into China’s hands, as it can take up to twenty years for a new deposit to reach its projected capacity, making it difficult for even the most ambitious competitors to keep up with Chinese companies.
China is also ahead of other countries in the processing of minerals used to make batteries. The Celestial Empire controls 95% of the world market for manganese processing services, 73% of the cobalt, 70% of the graphite, and 67% of the lithium. According to experts, the energy-intensive mineral processing process in China is actively subsidized by the authorities, which keep energy tariffs for the industry at economical levels. The toxicity of some of these activities worries Chinese authorities less than other governments.
At the level of battery component production, China remains the undisputed leader, controlling 74% of the separator market and 82% of the electrolyte market. By producing cheaper cathodes based on lithium and iron phosphate (LFP), the company has occupied half of the global cathode market. To a certain extent, this played into the hands of CATL and BYD, which specialize in the large-scale production of LFP batteries. China produces 73% of the nickel, manganese and cobalt (NMC) based cathodes and 99% of the LFP type cathodes.
After all, China produces finished traction batteries in quantities equivalent to 66% of world market capacity. Industry experts estimate that Chinese companies can produce battery cells at half the cost of North America or Europe. In this country, labor is cheaper and there are enough suppliers of technological equipment. China directly accounts for 54% of global electric vehicle production. Any other country has little chance of repeating China’s success on the way to becoming a self-sufficient battery manufacturer. According to analysts, companies outside of China will have to work with local manufacturers in one way or another.