China dominance of global lithium-ion batteries to remain intact, Rystad Energy says

China will continue to dominate the global production of lithium-ion batteries this year, as manufacturers will bypass higher tariffs by shifting their bases to other countries, consultancy Rystad Energy said.

“We predict that this year’s [lithium-ion battery] production will exceed 1,500 GWh (Gigawatt-hours), and production in China will exceed 1,000 GWh,” Chen Shan, battery market analyst at the Norwegian consultancy, told the Post in an email.

The move by the US and Europe to impose higher tariffs on Chinese electric cars will prompt more Chinese EV and battery manufacturers to consider establishing factories overseas to reduce costs and enhance competitiveness, said Chen.

This situation could accelerate China’s strategy to diversify its trade relationships, particularly in the Asia-Pacific region and Brazil, as it strengthens ties to mitigate the potential loss of market share in some regions, according to Rystad Energy.

Some countries in Southeast Asia, such as Thailand, have preferential policies such as subsidies for battery manufacturing and lower tariffs, which could attract more Chinese EV and battery manufacturers to increase their presence in the local market, according to Shen.

Chinese EV and battery manufacturers have also been eyeing Australia as part of their global expansion plans, with Xpeng announcing plans to sell right-hand-drive vehicles through a local car distributor later this year.