Chinese Battery Manufacturers’ Shares Plunge
SHANGHAI, Oct. 10 – Shares in Chinese battery companies took a hit on Friday following China’s announcement of new restrictions on the export of lithium battery components. This decision is seen as a way to tighten control over technologies important for energy storage and electric vehicles.
Previously, China had also broadened its constraints on rare earth exports amid escalating trade tensions with the United States, particularly ahead of an upcoming meeting between President Trump and President Xi Jinping.
The Chinese government’s export regulations will require permission for high-end lithium-ion batteries, cathodes, graphite anode materials, and certain technological know-how, starting from November 8, as stated by the Commerce Ministry on Thursday.
At market close on Friday, shares in battery manufacturer Hyundai Amperex Technology dropped by 6.82%, while Tianqi Lithium and EVE Energy fell by 7.17% and nearly 11%, respectively. BYD also declined by 2.54%.
Cory Combs, who leads critical minerals research at Trivium China, remarked, “The new regulations significantly expand the reach of China’s lithium battery supply chain.” He expressed concerns that if the Chinese government begins to slow down and restrict export licenses, it could put foreign producers and China’s overseas joint ventures at risk.
However, analysts from Natshang Securities believe that the new regulations are unlikely to lead to an outright ban. They suggest that the impact will be limited, as exporters may only face a temporary process. They noted that previous restrictions on materials like natural graphite hadn’t caused a significant drop in exports.
Chinese companies have invested heavily in factories around the globe, including the Ford CATL plant in the United States, and these operations depend on materials sourced from China.
Additionally, a newly revised bill aimed at tightening conditions for China’s electric vehicle tax exemption has also negatively impacted stock prices. On that note, China’s new energy vehicle index fell by 6.02%.
