News Brief
After Disrupting Global Supply Chains With Rare Earth Curbs, China Tightens Export Restrictions On Critical EV Battery Technologies
Cylindrical lithium-ion batteries.
China’s latest export restrictions on eight key electric vehicle (EV) battery technologies officially took effect this week.
These measures, which were first announced six months ago by the Chinese government, now require manufacturers using these technologies to produce EV batteries to obtain government licenses before transferring them abroad, South China Morning Post reported.
The export controls primarily target key technologies used to produce battery cathodes, a crucial component in lithium-ion batteries that determines their energy density and performance.
Three specific technologies related to making intermediate substances for these cathodes are affected, including those used to produce lithium iron phosphate (LFP), lithium manganese iron phosphate (LMFP), and other phosphate-based materials with defined chemical compositions and performance standards.
In addition to cathode technologies, five technologies related to the extraction and processing of lithium—essential for producing materials like LFP—are also included in the restrictions.
The rules also specify that gallium extraction technologies, used in the production of semiconductor materials, will now be restricted, focusing on ion exchange and resin techniques rather than the previously mentioned broader “dissolution method.”
China’s dominance in the global EV battery industry is largely driven by its control over cathode technologies, with the country holding over 95 per cent of the global production capacity for key materials like LFP and LMFP.
LFP powered 74.6 per cnet of the electric vehicles made in China last year, including Tesla’s Model Y, produced in Shanghai.
LMFP, considered a promising next-generation cathode material, offers a 15-20 per cent increase in energy density compared to traditional materials, though it is still in early commercial use.
China also controls 16 per cent of the world’s lithium reserves and produced 70 per cent of all cathodes globally in 2022, according to the US Energy Information Administration.
These materials are becoming increasingly important in the rapidly growing global EV market.
As such, the export restrictions are seen as a way to prevent these critical technologies from flowing overseas and to safeguard China’s competitive edge in the sector.
As countries like the United States, European Union, and Japan continue to pressure Chinese companies to localize battery production, these new export restrictions are likely to give China greater leverage, making it more difficult for foreign manufacturers to develop independent supply chains for these critical materials.
With cathode materials accounting for roughly 30-40 per cent of battery costs, China’s control over the production of these materials is central to the future of the global EV market.
The tightening of these controls is seen as a strategic move by China to ensure that its companies maintain a leading position in the growing and highly competitive EV market.
This comes after China had earlier in April imposed tighter export controls on rare earth magnets — critical components for electric vehicles, wind turbines, and electronics.
The move resulted in a sharp drop in global shipments and rising uncertainty across supply chains.
Export approvals became slow and selective, forcing manufacturers across sectors to wait weeks for shipments or rework sourcing entirely.
India’s electric vehicle and auto parts industry was also among those hits by Chinese export curbs, with automakers reporting delays in sourcing magnets and electric motor component.
In response, a global counter-effort, including in India, is underway to diversify sourcing.
India is reportedly working on a plan to expand rare earth output.
The Modi government is reportedly planning to invest between Rs 3,500 crore and Rs 5,000 crore to provide incentives to companies to set up rare earth processing and magnet production facilities to meet local demand.
Further bolstering domestic priorities, state-run IREL (India) Limited was directed in June 2025 to suspend a 13-year-old export agreement with Japan, redirecting rare earth supplies for local use to reduce reliance on Chinese imports.
