China Puts New Restrictions on E.V. Battery Manufacturing Technology

The Chinese government said on Tuesday that it would restrict any effort to transfer out of China eight key technologies for manufacturing electric vehicle batteries, a move that could cement the country’s already dominant role in the production of electric cars.

The plan could make it harder for Chinese electric carmakers to set up factories overseas, as the European Union has pushed them to do. Effective immediately, any overseas transfer of these technologies through trade, investment or technological cooperation will first require a license from the Chinese government, the Ministry of Commerce said in a statement.

Chinese manufacturers have achieved important breakthroughs in the past five years in making inexpensive batteries that can provide considerable driving range for electric vehicles. The new generation of battery technology is central to China’s success in building electric cars that are considerably cheaper than electric and gasoline-powered cars made in other countries.

The new restriction on battery technologies comes less than three months after Beijing began requiring licenses for exports of seven kinds of rare earth metals and the magnets made from them. Those restrictions have already caused considerable disruption to companies in the West and Japan that manufacture cars, robots and other advanced devices that require electric motors with small but powerful rare earth magnets.

BYD, which is based in Shenzhen, China, and has recently overtaken Tesla as the world’s largest manufacturer of electric cars, made a technological breakthrough five years ago when it introduced a new line of lithium-ion batteries. Instead of using a costly chemistry based on nickel, cobalt and manganese, the new batteries used inexpensive iron and phosphate. The new chemistry also appears less likely to catch fire in collisions and other incidents.

BYD’s archrival, CATL in Ningde, China, introduced similar technology at almost the same time. Lithium iron phosphate batteries now command more than half the global market and are made almost entirely in China. Battery and chemicals companies in Japan, South Korea, Germany and the United States still rely mainly on chemistries with nickel, cobalt and manganese, but they have been trying to catch up.

The Ministry of Commerce provided few details in its statement about why it was imposing the license requirement. “This is an adjustment to the existing restricted technologies based on the development and changes of technology,” the statement said.

China has close to 50 graduate programs that focus on either battery chemistry or the closely related subject of battery metallurgy. By contrast, only a handful of professors in the United States are working on batteries.

The Ministry of Commerce imposed the new license requirement on overseas transfers of three core technologies of lithium iron phosphate batteries. It also imposed a license requirement on five key technologies for producing lithium for all kinds of batteries.

Lithium iron phosphate batteries were invented nearly 30 years ago in the United States. But for many years, these batteries could be fully recharged only a few times.

With many years of study, Japanese researchers gradually developed ways to increase the number of recharges that these batteries could withstand. BYD and CATL then figured out a way to further increase the number of recharges, making it comparable with more traditional battery chemistries. They also figured out how to pack more electricity into each of the new batteries and how to mass produce them.

The ministry’s action came as China has been racing ahead of the rest of the world in many areas of research, including chemistry. Researchers in China lead the world in publishing widely cited papers in 52 of 64 critical technologies, according to calculations last year by the Australian Strategic Policy Institute.

A once-a-decade meeting last summer of China’s Communist Party leadership chose scientific training and education as one of the country’s top economic priorities. That goal received more attention in the meeting’s final resolution than any other policy did, except strengthening the party itself.

Xinyun Wu contributed research.