China tightens restrictions on lithium-ion batteries and graphite materials exports

China is continuing to make life harder for its international counterparts. After announcing fresh restrictions on rare-earth exports at the start of last week, Beijing has now unveiled additional limits affecting exports of lithium-ion batteries and the materials used in graphite cathodes and anodes.

According to China’s Ministry of Commerce, from 8 November these exports will require government authorisation. In addition, equipment and technologies connected to the battery supply chain will be subject to tighter scrutiny.

The decision comes at a time of rising tensions between the US and China, shortly ahead of a meeting between the two leaders to discuss a potential trade deal.

Impact on Europe

Tighter oversight of these exports does not affect only the US. Europe’s automotive industry-heavily reliant on these materials-will also feel the consequences. The new restrictions complicate Europe’s efforts to cut its dependence on Beijing during the shift to electric vehicles, making projects to build a self-sufficient supply chain more expensive and more difficult, and weakening Europe’s ability to compete with Asian and North American giants.

“Belief is that the Chinese government wants to preserve China’s technology leadership in the battery supply chain,” Citigroup Inc analysts told Bloomberg. “With the new mechanism, the government will have the means to manage exports if it deems it necessary,” they added.

Shares falling

On the day of the announcement, several Chinese battery manufacturers saw their share prices drop. Contemporary Amperex Technology Co. (CATL) fell 7.3% in Hong Kong, while Eve Energy Co. lost 10.8% in Shanghai and Tianqi Lithium Corp. slid 4.4%.