US Transportation Secretary, Pete Buttigieg, has called for action to be taken to reduce China's dominance in the production of the batteries that power electric vehicles. In an interview with Bloomberg TV, Buttigieg highlighted the need for the US to build strong relationships domestically and internationally for raw materials and refining capacity. He noted that "refining capacity on many of the key materials for EV battery components is very concentrated in China". Buttigieg believes that the US needs to position itself with an "economically sensible, environmentally sensible, and geopolitically stable approach" to ensure it can secure the key elements necessary for the renewable energy transition that is vital for the US economy.
According to BloombergNEF, Chinese firms currently represent more than 50% of the EV Battery market and fulfill up to 90% of the demand for some battery materials. The economies of scale enjoyed by those firms have made it challenging for US and European automakers to match the efficiency of their Chinese counterparts. However, in response to this challenge, automaker Ford and the world’s largest EV battery maker, Contemporary Amperex Technology (CATL), have agreed to build a battery plant in Michigan. In February, Bloomberg News reported that Chinese authorities are scrutinizing the deal to ensure that the US carmaker does not gain access to CATL's core technologies.
While Beijing is pleased that the CATL-Ford deal showcases China's prowess in the EV battery space, concerns remain that the US carmaker could gain access to competitive aspects of CATL's technology. According to sources familiar with the matter, Chinese officials are concerned that the US automaker may access CATL's core technology, which could potentially threaten Chinese dominance in the sector. As such, they are taking measures to ensure that CATL's proprietary technology does not fall into the hands of their US counterparts.