China Tightens Control Over EV Battery Technology Exports

China has introduced new export licensing for EV battery technologies, restricting the export of cathode materials production and nonferrous metal refinery or processing technologies. This move aims to tighten China's grip on the global electric-vehicle battery industry.

China has introduced new export licensing requirements for electric-vehicle (EV) battery technologies, aiming to tighten its grip on the global electric-vehicle battery industry. The latest move by the Chinese government restricts the export of cathode materials production and nonferrous metal refinery or processing technologies, a significant development that could impact global supply chains.

The export restrictions, implemented in response to recent tariffs imposed by the U.S. Trump administration, follow a series of measures China has taken to control the supply of rare earth elements used in various industries, including automotive, aerospace, and defense. This latest action is part of China's broader strategy to secure its economic interests and maintain its dominance in the EV battery market.

The restrictions are expected to have a substantial impact on the global automotive industry. Nissan, for instance, has already revised its production plans for the new Leaf series electric vehicle due to shortages of rare earth elements [1]. Similar issues are being faced by other automakers globally, including Suzuki Motor, which has halted production of its flagship Swift subcompact due to supply chain shortages [1].

The new licensing requirements could exacerbate these supply chain disruptions. Companies relying on Chinese exports for critical components may face delays or increased costs, potentially leading to production halts or reduced output. The Alliance for Automotive Innovation, representing major car manufacturers like GM, Toyota, and Volkswagen, has warned of production reductions and even shutdowns of assembly lines without access to magnets and rare earths [1].

While China has eased some of its restrictions on rare earth elements by approving a certain number of export licenses, the global supply chain continues to feel the shortage of magnets and other rare earth-derived parts. The latest export licensing requirements for EV battery technologies are likely to further compound these issues.

The impact of these restrictions extends beyond the automotive industry. The mining sector is also grappling with the consequences. Australian mining giant Broken Hill Proprietary Company (BHP) has signed memorandums of understanding with Chinese battery giants CATL and BYD to install advanced energy storage systems and on-site battery recycling at its mines [2]. This partnership aims to reduce greenhouse gas emissions and enhance the recycling process, but the new export restrictions may pose additional challenges.

The global semiconductor industry is also affected. Nvidia, for example, had to suspend sales of its H20 GPUs to China due to US export restrictions but has recently received approval to resume shipments [3]. The company’s ability to navigate geopolitical challenges and meet high demand for advanced AI technology in China is a testament to its resilience in the face of regulatory hurdles.

The new export licensing requirements underscore China's strategic control over the global EV battery market. As the industry continues to grow, with projections suggesting that one in every four vehicles on the road will be electric by 2026 [2], the impact of these restrictions could be profound. Companies and investors must closely monitor the situation and adapt their strategies accordingly to mitigate potential disruptions in the supply chain.

References:
[1] https://oilprice.com/Latest-Energy-News/World-News/Nissan-to-Curb-Production-of-New-EV-Amid-Chinas-Rare-Earths-Export-Controls.html
[2] https://www.cnbctv18.com/business/companies/mining-goes-electric-bhp-taps-china-battery-giants-to-cut-emissions-ws-l-19637069.htm
[3] https://www.fxleaders.com/news/2025/07/15/nvidia-u-s-clears-nvidia-to-resume-h20-gpu-sales-to-china/