February 5, 2024

Renewable Power: How China Came to Dominate the Electric Vehicle and Battery Industry

The Associated Press/Achmad Ibrahim/Scanpix
BYD electric cars on display during a launch event in Jakarta, Indonesia, 18 January 2024.
BYD electric cars on display during a launch event in Jakarta, Indonesia, 18 January 2024.

In China, electric vehicle technology has undergone a revolution over the past twenty years: from lagging behind the developed nations to becoming an industry leader. In the race for global leadership in the battery supply chains, the PRC has solidified its position through a strategic combination of domestic policies that include electric vehicle and mineral resource policies, complemented by its strategic five-year plans.

European policymakers are increasingly concerned that China wields control over such a large share of the electric vehicle and battery production and supply chain, given the industry’s importance not only to the clean energy future globally but also to the EU’s environmental commitments. The political awakening was followed by the introduction of the Critical Raw Materials Act in 2023 — i.e., over twenty years after China had begun building out its EV industry.

Now, concerted efforts are essential to bolster Europe’s position in the rapidly evolving technological landscape, especially in battery production, and maintain its competitiveness on the global stage. Recognising the multifaceted risks associated with potential supply chain disruptions, Europe needs to prioritise the development of local supply chains — where possible — not only to enhance resilience against China but also to promote local innovation, economic growth, and energy security. Absent such a possibility to have supply chains located domestically, they should be diversified to mitigate the risks associated with overreliance.

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