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  • Writer's pictureLeila Khalid

The Global Dominance of Chinese Lithium-Ion Batteries

Written By: Leila Khalid

Edited By: Vanessa Lu Langley

Lithium-ion batteries are the hidden powerhouses of many of the products we use in our everyday lives, and the demand for these batteries is continuing to increase dramatically. Lithium is a very unique element, as it is extremely light and has a high electrochemical potential (Rapier, 2019). This gives lithium batteries an especially high energy density, as they can hold a significant amount of energy in a small amount of space, making them ideal for portable electronics such as cellphones and laptops (EPA, n.d.). Additionally, lithium batteries are essential to the production of electric vehicles (EVs) which are becoming increasingly prominent as countries try to limit their carbon footprints (Rapier, 2019). Nonetheless, not every country has the ability to mine and manufacture lithium batteries. China is far and above the most dominant player in the lithium-game, with control along every step of the global supply chain.

Although China only contains about 13% of the world’s lithium supply, it has significantly more control and production capabilities than any other country (Scott, 2022). Even though most of the elements important to battery production, including lithium, cobalt, manganese, and nickel, are mined outside of China, no one else has the infrastructure to process these materials into batteries at the desired rate. This allows China to control up to 80% of the lithium battery market (Katwala, 2022). In terms of EV batteries specifically, six out of the 10 major producers are Chinese (Katwala, 2022). This domination of lithium batteries by the Chinese is not slowing down, as they are continuing to expand both domestically and abroad. Most importantly, the Chinese company Lithium Tianqi now owns significant portions of the mines in both Australia and Chile – the world’s two largest lithium producers (Katwala, 2022). What China may lack in natural lithium supply, it makes up for with these crucial international investments.

Source: BloombergNEF

China’s near monopoly on the lithium battery supply chain is a growing concern for Western countries for a number of reasons. For one, experts have expressed concern over the threat of a potential trade war over lithium-ion batteries. However, China is still heavily dependent on imports from Western countries for elements such as nickel, which would be withheld if a trade war ensued (Katwala, 2022). In any case, Western countries do not wish to be fully reliant on China for such a critical resource. If one considers Russia’s invasion of Ukraine and the subsequent oil crisis, it is evident that complete dependence on a country involved in complex geopolitics can be catastrophic. With this concern in mind, many Western countries have made moves to increase their own domestic production of lithium-ion batteries in hopes of catching up to China.

The United States and the European Union are the next largest lithium battery producers, and have been making strides to penetrate China’s stronghold on the industry. The US and many European countries, as well as Canada, Japan, South Korea, and Australia, formed the Minerals Security Partnership in June of 2022 (Scott, 2022). This partnership allows member countries to secure supplies of critical minerals, including lithium, from non-Chinese companies. In a similar fashion, the EU passed the European Critical Raw Materials Act to improve control over the lithium battery supply chain (Scott, 2022). Additionally, with the recently passed Inflation Reduction Act, the US now requires automakers to source their battery components domestically in order to receive EV tax credits (Broughel, 2022). This act will also remove the cap on the number of clean vehicles that can receive the tax credits (Broughel, 2022). While these countries are passing legislation to try to stick their foot in the door of lithium battery production, these actions are also increasing the demand for EVs, making it even more difficult to obtain a complete domestic supply.

Another reason countries are struggling to weaken China’s dominance is due to the highly time-consuming and expensive nature of lithium battery production. To use lithium ore in batteries, it first must be converted to lithium carbonate or lithium hydroxide, which is an expensive process (Katwala, 2022). The largest expense is building the manufacturing capacity, which is estimated to cost six times more in the US and the EU than in China (Ryan, 2023). However, operating costs are also significantly more expensive outside of China (BloombergNEF, 2022). It is estimated that the US would have to invest a whopping $87 billion in order to meet their expected battery demand for 2030 (BloombergNEF, 2022). However, China did not simply benefit from a head start: over the past decade, the Chinese government has invested over $100 billion in “new energy” vehicles and EV research (Pike, 2022). While many countries understand the importance of lithium batteries now, China initiated significant interest as early as 2012 (Pike, 2022).

One potential area that can distinguish new lithium battery production outside of China is the emphasis on sustainability and clean energy. A majority of the lithium refinement and processing done in China is powered by burning coal (Scott, 2022). However, the Belgian company Umicore has announced that its plant in Finland will be powered solely using wind energy, and has proposed another carbon-neutral plant in Poland (Scott, 2022). These steps toward clean energy in lithium production factories is essential as countries try to completely transition to renewable energies. There has also been increased attention towards recycling the materials used in old lithium batteries which is of particular interest to most of Europe where access to supplies of lithium ore are limited (Scott, 2022).

A prominent example of innovation in lithium production in the US is Redwood Materials Inc., which announced a $3.5 billion expenditure to create a new battery manufacturing site in South Carolina (Randall, 2022). This enormous undertaking claims that half of the materials used in the battery production are recycled and that the entire facility will use solely clean energy (Randall, 2022). The company declared that this new plant would ultimately reduce the carbon dioxide emissions by 80% when compared to the original Chinese supply chain (Randall, 2022). Ultimately, although Chinese infrastructure is well-established, they fail to produce lithium batteries in a sustainable manner. In fact, Canada and the US are ahead of China when considering ESG metrics, as seen in the image below.

Source: BloombergNEF

The demand for lithium based batteries is only continuing to rise as countries across the globe focus on the clean energy transition. Although China has historically dominated every other country in terms of lithium refinement and processing, other countries are beginning to follow suit with some haste. In 2022, numerous pieces of legislation and on-the-ground projects that focused on recycled materials and renewable energy sources in production were implemented outside of China. Although there is much ground to make up, it is clear that the future of lithium production is still up for grabs.



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Environmental Protection Agency. (n.d.). Used Lithium-Ion Batteries. EPA. Retrieved March 7, 2023, from

Katwala, A. (2022, June 30). The world can't wean itself off Chinese lithium. Wired. Retrieved March 7, 2023, from

Pike, L. (2022, October 31). China is owning the Global Battery Race. that could be a problem for the U.S. Grid News. Retrieved March 7, 2023, from

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Scott, A. (2022, October 29). Challenging China’s dominance in the lithium market. C&En. Retrieved March 7, 2023, from

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