By Owen Evans
China’s stranglehold on the battery market could be loosened with emerging technology that substitutes hard-to-source minerals with alternatives widely available in the West, such as sulphur, according to some U.S.-based manufacturers.
Over the past three decades, China has steadily maintained a grip on the production and manufacturing of every component of battery cells, the current lithium-ion batteries that are integral to modern societies.
Traditional lithium-ion batteries are made of three key components. A graphite anode, a lithium-based cathode, and an electrolyte made from lithium salts.
Lithium can be sourced from Australia, Chile, or Argentina. But the rest is mined, processed, and sourced from China.
Batteries also include cobalt and nickel, which are heavily sourced from Congo-Kinshasa and Indonesia, with Chinese companies dominating processing, according to the U.S. Energy Information Administration.
Alternatives, such as lithium-sulfur batteries, replace cobalt and nickel with sulfur (the tenth most abundant element in the universe) and use U.S.-sourced lithium-metal instead of imported materials.
Keith Norman, Chief Sustainability Officer at the Silicon Valley startup Lyten, told The Epoch Times that China has “definitely executed monopolies.”
But Western start-ups like his said that while they cannot compete with China in terms of lithium batteries, they could create their own game by making entirely new kinds of technology.
New Generation
A 2024 report by the Carnegie Endowment for International Peace (CEIP) think tank argued that the U.S. policy response to the battery crisis must be the “urgent commercialization of next-generation technologies.”
The report said that next-generation batteries represent a “fundamentally new architecture” compared with today’s lithium-ion batteries, leaving behind liquid components for a solid-state architecture and eliminating graphite, a material over which China “has a chokehold on production.”
Furthermore, the per-kilogram prices of Chinese lithium-ion batteries exported to the United States are lower than the same product sold to any other market, according to an Atlantic Council report from January.
The report said it may be due to Chinese battery exporters aiming to undercut U.S. and allied manufacturers.
US Sourced
Unlike traditional cells, Lyten’s lithium-sulfur batteries eliminate the need for nickel, manganese, or cobalt—critical minerals that Beijing dominates—and instead use sulfur and U.S.-sourced lithium metal.
It has also begun U.S. production of battery-grade lithium metal.
At present, the vast majority of battery-grade lithium is processed and manufactured in China.
Keith Norman said that lithium-sulfur is manufactured utilizing the same facilities, equipment, and processes as lithium-ion batteries.
He said that China has ramped up its strategy to be the global leader in batteries.
“They’ve made it very, very difficult for anybody else to be successful building lithium-ion batteries,” he added.
“This is a very real risk when you have supply chain dependency on one country and the geopolitics behind that as a huge risk,” he said.
He added that he has seen in the drone market that some U.S. drone makers have had their supply of batteries cut off.
Earlier this year Skydio, America’s largest drone manufacturer, faced a supply chain crisis after Beijing prohibited Chinese companies from supplying Skydio with lithium-ion batteries and other components critical for building drones.
Lyten is not alone in its mission to be independent of China materials.
The Boston-based Pure Lithium says that all the materials for its battery, including lithium brines and vanadium, are readily available in North America, eliminating the need for international supply chains.
“Scaling always takes time in a huge market like batteries. There are dozens of companies working on the technology, and we expect lithium-sulfur to be that next platform to take a large chunk of global market share,” said Norman.
Risky Business
Battery manufacturing is a risky business fraught with a long list of bankruptcies and a graveyard of failed ventures.
Founded by former Tesla executives, Northvolt aimed to be a European-owned gigafactory, producing lithium-ion cells at scale and to capture 25 percent of Europe’s battery market by 2030.
On March 12, Northvolt announced that, after an “exhaustive effort to explore all available means to secure a viable financial and operational future,” it had filed for bankruptcy in Sweden.
In 2023, the United Kingdom battery start-up Britishvolt collapsed into administration.
At the time, the BBC reported that Britishvolt had asked the government to advance £30 million of a promised £100 million in support, but was refused as the company had not hit agreed construction milestones to access the funds.
The UK has one significant battery manufacturing plant, in Sunderland, which is operated by AESC (Automotive Energy Supply Corporation), that is majority-owned by Envision Group, a Chinese multinational specializing in renewable technologies, including wind energy and battery production.
Under the European Green Deal, starting in 2035, all new cars on the market cannot emit carbon dioxide, making it illegal to sell new fossil fuel-powered vehicles in the bloc, part of its push to electrify transport and meet climate goals.
The European Battery Alliance, launched in 2017 by the European Commission, has the political objective of making sure that European manufacturers produce 90 percent of the EU’s annual battery deployment needs in 2030.
‘No One Can Be Certain’
But one critic warned that state-driven targets may backfire.
Andy Mayer, energy analyst at the free market think tank the Institute of Economic Affairs, told The Epoch Times by email that the EU’s target for domestic battery production “is at best irrelevant” and at worst “will encourage malinvestment in future business failures.”
“No one can be certain that Western innovation can’t displace Chinese dominance in battery technology, it’s just unlikely, and doubly so if linked to a bureaucratic central plan under political direction,” he said.
“China has advantages in access to raw materials, economies of scale, and a proven track record of fast following any temporary advantage from novel invention elsewhere,” he added.
He said that a “more plausible challenge to China” may come from another emerging power, such as perhaps Hungary or Korea, both projected to be among the top 10 lithium-ion producers by 2030.
Or it could come from competition from other storage technologies like sustainable biofuels, hydrogen, compressed air, gravity-based systems, and next-generation batteries, he said.
“These factors speak to the value of global IP partnerships and trade diversification,” he said.
“European producers would be better off finding the next rising power and doing deals. European consumers would gain from lower prices and better storage solutions,” he added.
“That’s what matters, not the zip code of the factories,” he added.
Some Western companies are turning to China rather than trying to beat it.
In February, the British startup Volklec reached a licensing agreement with China’s Far East Battery (FEB) to use its technology to make batteries for energy storage and electric vehicles.
FEB claimed it will also provide engineers and other support to help Volklec scale up production at the UK Battery Industrialisation Centre (UKBIC), a partly government-funded battery factory in Coventry.
The Chinese company also promised to provide Volklec with access to its supply chain to lower costs.
Prevent China
Senior fellow at the American Enterprise Institute think tank and former Pentagon official, Michael Rubin, told The Epoch Times by email that the West needs to restrict Western supplies to China.
“The United States should not approach strategic technology and resources as an either-or prospect,” he said.
“Sure, some technologists suggest a next generation of batteries could supplant the need for lithium. But until that happens, and so long as China seeks to corner the lithium trade, then the United States must seek to prevent China from accessing the technology or means to dominate us,” he added.
Reuters contributed to this report.
