According to foreign media reports, all countries in the world are competing to control the lithium battery resources of electric vehicles. China is expected to surpass the United States and other countries in winning the global "arms race."
China has become a major player in the EV and HEV markets, with EVs and HEVs accounting for about half of global sales. As the second largest economy in the world, China is eager to develop this industry in China. The government hopes to import more lithium.
Simon Moores, managing director of Benchmark Mineral Intelligence, a research and data provider, said in an interview: "The era of lithium resources has come. It is a core component of 99% of electric vehicles, so demand continues to grow."
As the demand for electric vehicles soared, Chinese companies signed lithium supply deals increasing.
The demand for lithium resources emerged just a few years ago, Morse said. Until 18 months ago, the rekindling of interest in electric vehicles by nations around the world triggered an "arms race" around such resources.
China hopes "to control the supply chain of electric vehicles"
Governments and automakers have taken steps to develop electric vehicles and to phase out their ICE vehicles. Lithium batteries produce more and more power than traditional batteries.
The global promotion of electric vehicles can help reduce carbon emissions, which are magnified by concerns over air pollution. The Chinese government is also vigorously promoting and promoting electric vehicles.
Jay Jacobs, research director at Global X, said: "Given the domestic influence of the Chinese government, they are likely to achieve this goal if they want to be the world leader in electric vehicles."
"China is not only focusing on electric vehicle manufacturing but also acquiring lithium projects and supporting the growth of battery manufacturers so they can control more of the electric vehicle supply chain," he said.
Electric car revolution "was seriously misunderstood"
Analysts said Western companies' interest in lithium supplies has not reached the same level as Chinese companies.
Like China, Europe and the United States also have only limited lithium resources and must rely on imports from other places. Lithium is derived primarily from Australian ores and from salt water tanks in South American countries such as Bolivia, Chile and Argentina.
Some observers fear that electric car makers such as Tesla may eventually vaunted to grab key lithium resources, with China likely to be the largest player. However, Jacobs said even China acknowledges that a "winner-take-all" situation is unlikely to emerge from the global arms race on lithium supplies.
Jeffrey Christian, managing director of the CPM Group, said: "The shift to EVs is a serious misconception and simplification by governments, a shift that will take decades."
"Some people are full of confidence in the future of electric vehicles and lithium batteries, but their confidence is more based on conviction rather than concrete reality," he said.
Source: China Battery Network