The global automotive industry is undergoing a monumental transformation propelled by the surging wave of electric vehicles (EVs). Amid the contenders competing for supremacy in this market, China has emerged as a formidable frontrunner, poised to transform the industry’s landscape. With an insatiable appetite for the lithium powering these vehicles, China is strategically maneuvering to cement its dominance in the race towards lithium mercantilism.
Lithium mercantilism refers to the strategic competition among countries to secure control over the global lithium supply—a pivotal mineral indispensable in lithium-ion battery production essential for EVs. As the demand for EVs intensifies, so does the demand for lithium, creating a spirited competition for its resources. In this context, China has unquestionably risen as a key player in the global lithium market. China’s remarkable prowess in EV production is evident as it manufactured over 6.8 million electric vehicles in 2022, seizing more than 50% of the global production share. The United States follows as the second-largest EV manufacturer, producing over 800,000 EVs in the same year, while Germany, South Korea, and Japan contribute as well.
Lithium’s Role in EV Production
Lithium, a critical ingredient within lithium-ion batteries driving EVs, has garnered substantial global attention. Evident in China’s fervent pursuit of lithium mercantilism through its strategic partnerships and investments, all directed towards securing a stable supply of this invaluable mineral. Many of the targeted nations are strategically positioned within the dual “Lithium Triangles” spanning the globe. These “Lithium Triangles” encompass the two largest lithium reserves globally. The first triangle comprises Bolivia, Chile, and Argentina in South America, while the second encompasses Zimbabwe, Namibia, Mali, Tanzania, and the Democratic Republic of the Congo (DRC) in Africa.
The initial Lithium Triangle encapsulates Bolivia, Chile, and Argentina, collectively housing a significant 75% of the world’s lithium reserves. The second lithium triangle, situated in Africa’s Great Lakes region, includes countries such as Zimbabwe, Namibia, Mali, Tanzania, and the Democratic Republic of the Congo (DRC), adding to the global lithium reserves by another portion.
China’s Strategic Partnerships within the Lithium Triangles
China’s dedication to securing a stable lithium supply is manifest across all eight countries situated within the dual “Lithium Triangles.” In Bolivia, China’s consortium CBC collaborates to develop a substantial lithium mine projected to yield 40,000 tonnes of lithium carbonate annually. Moreover, in Chile, where China stands as the largest buyer of Chilean lithium, multiple joint ventures have been established within the lithium sector, including Tianqi Lithium’s acquisition of a stake in SQM. Further highlighting its strategic presence, China engages in collaborations and investments in Argentina’s lithium industry, particularly with state-owned Jujuy Lithium, positioning itself to address the burgeoning demand for lithium.
China’s pursuit of lithium mercantilism also extends to Africa, where strategic alliances are forged to ensure a steady lithium supply. In Zimbabwe, Sichuan Tianqi Lithium Co.’s acquisition of a majority stake in Bikita Minerals highlights China’s keen interest in Zimbabwe’s lithium reserves. Additionally, in Namibia, Mali, and Tanzania, Chinese entities like Ganfeng Lithium, BYD Company, and CATL venture into lithium mining with projections indicating substantial lithium carbonate yields. The Democratic Republic of Congo (DRC) also holds a pivotal role in China’s lithium endeavors. Its involvement in DRC’s lithium projects, including the Manono and Kamoto projects, emphasizes China’s commitment to establishing a prominent position in the global lithium market.
While China’s lithium mercantilism efforts have certainly reshaped the lithium market, they have also encountered criticism, primarily regarding potential resource exploitation and sustainability concerns. However, China counters these criticisms by asserting that its African investments are mutually advantageous and contribute to sustainable development. China’s strong standing in the global EV industry, coupled with its need for a steady lithium supply, underscores the rationale behind its strategic initiatives.
China’s Future Role in the EV Market
As the EV landscape evolves, China’s pioneering role is indisputable. The nation possesses the world’s largest EV market, the largest EV manufacturing base, and the world’s foremost EV battery market. China’s substantial presence in the global lithium market, combined with its investments in lithium projects, is set to solidify its position. Projections indicate that China will emerge as the unrivaled leader in EV production in the upcoming years, surpassing even the combined output of major players like the United States, Germany, and Japan.
Through calculated maneuvering, partnerships, and strategic investments, China secures its lithium supply—an indispensable resource for the future of electric vehicles. While criticisms linger, China’s resolute pursuit of lithium mercantilism underscores the lengths nations are willing to go to shape a sustainable transportation future. Amidst the surging global demand for lithium, China’s influential position is set to remain pivotal, establishing it as a key player in the ongoing electric revolution.