Many of the lithium-ion batteries that power much U.S. military gear are made in whole or in part in China. Now a Chinese lab is reporting a breakthrough that could increase Beijing’s control of the global market.
That’s a problem. During Operation Iraqi Freedom, for example, U.S. access to batteries for radios, night-vision goggles, small drones, and far more nearly faltered due to off-shoring and loss of U.S. production, according to a 2018 DOD assessment. The Pentagon’s need for batteries will only continue to grow; notably, the department plans to phase in vast numbers of electric vehicles over the next decade.
In March, the Qingdao Institute of Bioenergy and Bioprocess Technology, a member of the Chinese Academy of Sciences, announced a new manufacturing technique that enables a battery to charge more quickly and age more slowly, retaining its ability to hold a charge far longer. If China can further refine this technique and integrate it into standard lithium-ion battery manufacturing, this may improve the country’s substantial position in the critical field of advanced batteries, the global market for which is predicted to reach nearly a trillion dollars by 2028.
The Institute’s breakthrough was enabled by the PRC’s industrial and research policies, including funding directed to the battery project by the 14th Five-Year Plan’s National Key Research and Development Program (NKRDP) and the National Natural Science Foundation. The foundation, established in 1986, spends about $5 billion annually on scientific projects, including research into advanced battery performance.
The eight-year-old NKRDP funds joint research in strategic technologies in industry and academic organizations. Although the program is administered by the civilian Ministry of Industry and Information Technology, many of its projects have military applications—in line with China’s larger approach of civil-military fusion. Last year, for example, the NKRDP launched the “Key Materials and Technologies for High-Performance Energy Storage Batteries Under Extreme Conditions” project, which pulls together numerous universities with ties to the PLA such as Huazhong University of Science and Technology, Tsinghua University, Harbin Institute of Technology, and University of Science and Technology of China, as well as the aforementioned Qingdao Institute. Battery performance under rugged battlefield conditions is a key concern for the Pentagon, and also a focus of this Chinese project, which is interested in not only extreme hot and cold, but also “kinetic issues.” Project descriptions say battery life in extreme conditions is “instrumental for maintaining border stability” and that advanced battery research had “great strategic significance.”
China has taken this strategic significance to heart in the past decade and positioned itself throughout global lithium-ion battery supply chains. The latest payoff in performance research is only part of Beijing’s larger effort to dominate global lithium-ion battery supply chains, from mining to production.
The first of the two main raw materials needed for lithium-ion batteries is lithium. China has boosted its global share of the element’s production from 9.2 percent in 2018 to 17.8 percent in 2023, behind Chile’s 47 percent and Australia’s 24 percent. This was likely spurred by the Ministry of Industry and Information Technology’s repeated calls to improve the PRC’s energy sector, including “securing key resources such as lithium” and “establishing full life-cycle traceability for lithium batteries.”
The next-most important is cobalt. Some 75 percent of the world’s supply comes from the Democratic Republic of the Congo, which has massively increased production in the past 25 years. However, the most productive mines are directly owned by Chinese companies such as the MMG Group, Jinchuan Group International Resources, and CMOC Group, which alone accounts for nearly 30 percent of global output.
And yet, according to the International Energy Agency, China’s true strength lies in processing materials—some 60 to 70 percent of global lithium and cobalt processing occurs in the country—and manufacturing: the country produces nearly 80 percent of batteries. One single company, Contemporary Amperex Technology Co. (CATL), accounts for 35 percent of global lithium-ion battery production.
China’s production rose from 2.5 billion units in 2010 to 19 billion in 2020, roughly half of the total in the coastal, export-focused provinces of Guangdong, Jiangsu, and Fujian. A 2021 white paper on the advanced-battery market by the China Electronic Information Industry Development Research Institute found that CATL benefited as prices fell internationally and countries around the world pushed for green initiatives.
For its part, the U.S. government has begun to take the issue seriously. In 2021, the Department of Energy issued a National Blueprint for Lithium Batteries that called for securing U.S. access to raw materials, re-shoring lithium processing and battery production, supporting advanced battery R&D and training, and improving the nation’s battery recycling ecosystem.
This concern is echoed at the Pentagon. In 2021, Deputy Defense Secretary Kathleen Hicks called lithium-ion batteries “essential to thousands of military systems” and said that “a healthy battery supply chain is essential to the military.” The Pentagon included supply chains for advanced batteries in its “Securing Defense-Critical Supply Chains” action plan in February 2022, which mainly called for de-risking its access to these critical components. Last September, the Pentagon began an effort to encourage the return of U.S. lithium mining with a $90 million investment to reopen a mine in Kings Mountain, N.C. And in January, Congress ordered the Pentagon to stop buying batteries from CATL and three other Chinese manufacturers in 2027.
However, China’s leadership position did not occur overnight. China has been focusing on advanced battery technology since at least 2014, dating back to the PRC State Council’s National Energy Development Strategic Action Plan. As a result, by 2022, the Chinese government was investing almost 12 times as much as the United States in electric vehicles and their associated technology. The result is a lead today that may have just been extended into tomorrow.
Thomas Corbett is a research analyst with BluePath Labs. His areas of focus include Chinese foreign relations, emerging technology, and Indo-Pacific security studies.
P.W. Singer is Strategist at New America and the author of multiple books on technology and security.
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