Recently, the US side said that it would prohibit the Ministry of Defense from buying batteries produced by Chinese battery manufacturers. Subsequently, the Voice of America radio website reported that China completely stopped exporting gallium and germanium, two key rare metals to the United States.
The United States has also issued a ban on Chinese companies
The United States passed a new law that prohibits the country's Defense Department from buying batteries from six Chinese companies, including CATL and BYD, starting in October 2027.
The other four Chinese battery manufacturers that will be banned are Envision Power, EVE, Gotion Hi-Tech and Haichen Energy Storage.
According to the global network, the ban is based on the latest National Defense Authorization Act (fiscal year 2024) signed by Biden on December 22, 2023. The bill would give further impetus to the U.S. Congress's efforts to decouple the Department of Defense's supply chain from its geopolitical rivals.
At present, among the top ten power battery suppliers in the world, Chinese battery companies occupy six seats. According to a new round of statistics on the global power battery market released by SNE Research, a well-known research institution in South Korea, on January 9, from January to November 2023, the global registered electric vehicle (EV, PHEV, HEV) battery loading capacity is about 624.4GWh, an increase of 41.8% over the same period in 2022.
From the perspective of the top ten companies in the global power battery installed capacity, Chinese companies still occupy six seats, namely CATL, BYD, China Innovation Airlines, Guoxuan Hi-Tech, EVE Lithium Energy, and Funeng Technology.
The market share of the six Chinese battery companies reached 63.7%, and the combined market share of CATL and BYD reached 53.1%.
Among them, CATL's batteries are widely used in new energy passenger car models such as Tesla Model 3/Y, BMW iX, and Mercedes-Benz EQS, and sales continue to be high, and it is expected to show a growth trend in the future.
Completely stop exports to the United States!
In August 2023, the Chinese government announced export controls on gallium and germanium-related items, a move widely interpreted by the outside world as a countermeasure to restrictions on China by the United States and its allies in the high-tech sector.
In fact, behind this decision is China's careful consideration of the protection of its own strategic resources and the security of its global supply chain.
According to a report on the Voice of America radio website on January 21, customs data shows that Chinese exports of gallium and germanium to the United States have been completely stopped.
In addition, China's gallium exports to Japan will plummet by nearly three-quarters in 2023, and germanium exports to Japan will also drop by about one-third.
Gallium and germanium, indispensable materials for the production of advanced semiconductor chips, play a pivotal role in the modern electronics industry.
They are widely used in solar cells, optical fiber communications, night vision devices, aerospace and other fields, and are an important cornerstone to support the development of today's high-tech industry.
China occupies an overwhelming position in the global production of these two rare metals and has long been a major global supplier.
Global supply chain reshaping and market shocks
China's decision to completely stop supplying gallium and germanium has undoubtedly triggered a reshaping of the supply chain and market shocks around the world.
For the United States, this move has a direct impact on the stability of the supply chain of its semiconductor industry.
Due to China's dominance in gallium and germanium supply, semiconductor manufacturers in the United States have to face the risk of raw material shortages, which could lead to higher production costs and lower product competitiveness.
At the same time, other countries that rely on China's gallium and germanium supply, such as Japan, have also been affected.
This change has not only affected the normal operation of relevant enterprises, but also triggered a deep reflection on the diversification of supply chains and strategic resource reserves in these countries.
In addition, the landscape of the global gallium and germanium market is likely to change profoundly as a result. On the one hand, the price mechanism will be recalibrated to reflect new changes in the relationship between supply and demand, and on the other hand, countries may accelerate the search for alternative sources of supply or the development of new technologies to reduce dependence on traditional materials.