In a pronounced escalation of the ongoing technological rivalry between China and the United States, China has officially declared its intention to assert control over the export of graphite, a pivotal raw material used in the manufacturing of electric car batteries. This move is primarily rooted in considerations of national security, according to statements released by the Chinese Ministry of Commerce and the General Administration of Customs.
Remarkably, this decision has emerged closely on the heels of the United States implementing stricter constraints on the types of semiconductors that American corporations can supply to their Chinese counterparts. This tit-for-tat scenario exemplifies the manner in which protectionist measures can have a domino effect, reinforcing the notion of Newton’s third law, where every action begets an equal reaction.
However, both parties involved in this dispute are acutely aware of the exorbitant costs when geopolitics supersedes economic interests. This awareness underscores the complex interplay of political and economic factors at the core of this tech war.
As electric vehicles (EVs) continue their meteoric ascent in popularity, the race to secure a stable supply of graphite from sources outside of China intensifies. Recent data from the Institute for Energy Research highlights the exponential growth in global EV sales, exceeding 10 million units in the past year, marking a staggering 55% surge from 2021. Projections indicate that this figure will surge to nearly 14 million vehicles in the current year.
Moreover, the global market for graphite used in batteries has swelled by an astonishing 250% worldwide since 2018. It’s noteworthy that China held the premier position as the world’s leading graphite producer last year, contributing to approximately 65% of the overall global production.
Beyond graphite, China exercises a substantial influence over the global supply chain for vital minerals indispensable in EV battery production, refining approximately 60% of the world’s lithium and 80% of the cobalt, as confirmed by the US Department of Energy.
This move by China to assert control over graphite exports bears the potential to exert a profound impact on the global electric vehicle industry, triggering further reactions in the ongoing tech war between economic giants.
