The Asian country leads the production of batteries and parts for this type of car. And although there are initiatives in different parts of the globe and brands from other continents that lead sales, it is the eastern giant that supplies the necessary elements.
Igor Villarreal, manager of the storage department of the company Ikerlan, in the Basque Country, is clear: the Asian competition is very strong, but there are options. This expert in batteries and electric cars believes that the paradigm has changed and this type of vehicle is here to stay, but time is running out. For now, the conclusions are unanimous: China leads the market.
It does not matter that Tesla makes the best-selling electric car in the world and that the face of Elon Musk, its founder, is used as the image of a tireless entrepreneur: the eastern giant is the one that produces the elements that supply most of these devices. The brand can be American or German, but its pieces usually come from other latitudes.
China is the world’s factory, and this also applies to electric cars. Apart from taking over the production and assembly of cars, its control over electric vehicles goes much further: batteries come from this country, and that is one of the pillars. The other is software, but it still needs the lithium ions that make up the majority of this fuel. It is an irrefutable situation that new factories in other parts of the world are trying to mitigate, but there is a way to go before they reach the level of China. Because, furthermore, depending on third parties, as has been seen with the microchip crisis during the pandemic, is not the best option.
China continues to manufacture 70% of the batteries for electric cars in the world
And that does not mean that the elements that make up batteries, such as lithium, nickel, cobalt and manganese, come from China. Many come from other countries, but the majority of all critical minerals in the battery supply chain are refined and processed there.
In fact, all battery factory projects on land have something in common, as explained in the specialized magazine MotorPasión: they only assemble cells, and often without producing them in the first place. And while some plan to produce, they lack rare metals and raw materials from the other side of the world.
That is the source of China’s hegemony: it controls everything from the mine to the highway. This country is only a partial mining power, since it does not have all the elements, but it compensates for this by refining the materials that are needed to manufacture the batteries. Thus, as they say in this digital publication, cobalt essentially comes from the Congo (70% of world production), where China owns 80% of the mines, and from Russia. In contrast, China refines 75% of the world’s cobalt.
There is more. Lithium, for example, comes mainly from Australia, Chile, and China. The Asian giant, on the other hand, refines almost half of the world’s production. In 2021, it refined 44% of the 93,000 tons of crude lithium mined worldwide. As for nickel, it is mined mainly in Indonesia, while China refines 69%, according to data provided by the consultancy Benchmark Mineral Intelligence.
The country of the rising sun is also the country of the flourishing minerals. China dominates the manganese and graphite supply chain, and it has the largest manganese refining quota in the world, in a near-monopoly situation. Although it extracts less than 10% of the world’s supply, it refines 95%.
The same thing happens with graphite. China has the monopoly: not only does it extract 64% of natural flake graphite, it converts 100% of the world’s mined graphite into the spherical graphite needed for battery anodes. From a mining point of view, Benchmark Mineral Intelligence forecasts that China will be the second largest source of this mineral in the next decade, after African countries like Mozambique and Madagascar.
If we stop at this point, its control goes further: the Asian country produces 69% of the world’s synthetic graphite, obtained from petroleum coke. Most of it comes from Inner Mongolia, where electricity is cheap, or from Sichuan province, where there is abundant hydropower.
Arriving at this hegemony is not easy. The refining of minerals hardly takes place in Europe due to the pollution it causes. Due to the environmental restrictions of the old continent, almost everything stays in Asia, which is laxer in terms of legislation.
There is also a third stage where China is a specialist. The anodes and cathodes of the cells that make up a battery are essentially made there. The Asian country produces 78% of the cathodes and 91% of the anodes. For this reason, the fact that a brand is headquartered in a country or flaunts a nationality behind the wheel does not reflect reality: China continues to manufacture 70% of the batteries for electric cars in the world.
This situation leads to two problems. One is the almost total dependence on this country, with the political and geographical eventualities that can cause a specific crisis or prolonged shortages. Another is the effect on the environment. The extraction of metals such as lithium, cobalt, manganese, and nickel generates a large amount of CO2 and is often carried out in unsafe conditions. Something that not only affects the environment, but can give rise to armed conflicts.
Projects like the one mentioned by Ikerlan are trying to mitigate both issues. On the one hand, it seeks to be less dependent on China. On the other, it focuses on looking for more sustainable extraction and assembly systems. This is the case for Giga Storage, a battery company based in the Netherlands and Belgium. Its financial director, Lars Rupert, stated in a Triodos Bank publication that its products contained cobalt, a scarce material, and nickel, which is highly coveted, and that they tried to acquire it with certain environmental guarantees to reduce the impact.
“We buy cobalt with a certificate from the Fair Cobalt Alliance, which monitors working conditions and the environmental impact in the mines. For another super-battery, the Buffalo, instead of those heavy metals we already use iron phosphate, which is less scarce and easier to extract,” he explained, noting that China is “by far” the “largest supplier of lithium battery cells”.
“Although we would very much like to not be so dependent, there is hardly any other option. At the moment, we are looking at the activity of Western integrators, companies that build batteries. And we are working on alternatives to Chinese lithium, but they are not yet operational”, he stated, reflecting on the possibilities of recycling or increasing the duration of batteries to avoid waste, but still certain of one thing: the Asian country is the absolute leader.
