Technical reasons for the suspension of Asian batteries

Why is China's battery industry struggling?

China's battery industry is the most vulnerable to consolidation over the next few years, due to overcapacity. By our estimates, utilization at battery factories in China languished at under 50% over the first eight months of 2023. Exports are helping to offset some of the pain, with China's share of the global battery market on the rise.

Are Asia's top battery players a global leader in the EV supply chain?

Asia's top battery players have taken a lot of risks to be global leaders in the EV supply chain. They've built up capacity for a market that has not yet fully arrived. To keep their lead, they now need to shift more investments abroad, even with oversupply in some home markets.

How will the new battery law affect Asian battery producers?

The path to this legislation has spanned three years, witnessing Asian battery companies transition from initial apprehensions to active participation, and ultimately, acceptance of the impending paradigm shift. Upon the new battery law's enforcement, Asian battery producers exporting to Europe will confront three primary challenges:

Why are Chinese battery Investments a problem in Europe?

Potential Chinese battery investments on the continent were also likely to be complicated by the ongoing trade dispute between Brussels and Beijing over EU tariffs on Chinese electric vehicles, he added. “The Koreans are not expanding, the Chinese have suspended construction and Europe’s new entrants are dropping like flies,” said Bush.

Why are Chinese companies pursuing alternative batteries not based on lithium?

Lithium technologies are expected to advance quickly over the next few years. However, companies in China and beyond are frantically pursuing alternative batteries not centred around lithium, in part because the minerals needed to make the current options come from just a few countries.

Is battery technology politicized in China?

But even before that happens, we are already seeing battery technology become increasingly politicized in both the United States and China. To bring the Michigan plant to fruition, Ford has been careful from the beginning. The deal it struck with CATL ensured that the Chinese company would not get any stake in the plant or ability to control it.