Battery shortages eat into the e-car industry’s margins.
Rare earths, gallium or magnesium: China can draw on a wealth of raw materials and intermediate products, an invaluable advantage for its domestic industry. But now there is unusual news: Lithium batteries are becoming scarce. As reported by the trade magazine Mining.com, among others, the People’s Republic is currently struggling with supply problems in battery production. The government therefore feels compelled to intervene and wants to strengthen supervision of the sector, Mining.com says, citing the Ministry of Industry and Information Technology. The move is intended to prevent hoarding, price gouging and unfair competition in the value chain.
The country’s booming electric vehicle industry desperately needs the batteries, and rising component costs are costing manufacturers profits, the report adds. However, China is not only a major sales market, but also the largest exporter of lithium batteries, according to BloombergNEF. 75 percent of total battery cell production capacity and 90 percent of anode and electrolyte production is in the country. Whether the problems in China will also affect exports remains to be seen.