If the story of the international struggle for mastery was a tale of coal and iron in the 19th century, and oil in the 20th, too many strategists are prepared to declare the 21st the era of semiconductors and AI. This ignores a truth hidden in plain sight. Whoever powers the world rules the world. It will not be the United States and China’s tug-of-war over semiconductors or AI that will decide the future of the world order: It will be control of the batteries which power them. The 21st century struggle for world order is underway, and China is winning this race. To protect global democracy, the United States must step up its game.
Commanding 77 percent of global production, China is currently the world’s sole battery superpower. Six of the ten largest manufacturers are based in China, lending the nation a de facto monopoly over the industry. Remarkably, China has supplanted the conventional model of globalized trade—where Chinese firms produce but American firms innovate—leading both the manufacturing and research of advanced battery technologies. Generating over 50 percent of all battery patents, China’s research output outstrips the rest of the world combined. China’s CATL, the largest corporation in the industry by far, has already unveiled a pioneering “semi-solid state battery” they claim can power entire airplanes. Despite other nations venturing into the industry, China’s monopoly remains indisputable. By 2030, China is projected to still produce twice as many batteries as the rest of the world.
China’s iron grip over the battery pervades both consumer and defense markets. A majority of smartphones, electric vehicles like Tesla and Chinese alternatives, and other critical technological products are manufactured with Chinese batteries. Foreign manufacturers often import and utilize Chinese batteries as well. For example, 87 percent of United States battery imports originate from China. The United States military hardly fares better. From 5th generation jets to tanks to submarines, the United States’ national security in the air, on land, and under the sea is increasingly dependent on Chinese batteries. Unable to circumvent China’s monopoly, most nations find themselves in a similar predicament, their economy and military powered by Chinese batteries.
The importance of batteries is further accentuated by climate change. Renewable energies, dependent upon increasingly unpredictable weather patterns, are unreliable. A single poorly timed cold snap or period of calm can leave nations reliant on solar or wind trapped in rolling blackouts. The battery emerges as the pivotal technology enabling our sustainable transition to a clean green world. Through developing a high-efficiency store for electricity, peaks in renewable energy generation can be redistributed when weather conditions prove unfavorable, ensuring a continuous flow of electricity to our homes and factories. Batteries act as the linchpin of our global aspiration for a post-carbon world, yet they are almost exclusively made in China.
Nearly all geopolitical arenas are irrevocably linked to the battery. From fighting climate change and building the “Internet of Things” to space exploration and military modernization, the cutting-edge technologies of today all depend on it. Consequently, it is no surprise that the value of the battery market is expected to grow 30 percent annually until 2030, expanding fourfold. It just may be their control over the battery which hands the 21st century to the Chinese Communist Party.
To combat growing Chinese influence and strategic dependence on a geopolitical rival, the United States is increasingly investing in its cutting-edge battery research and manufacturing capabilities. President Joe Biden provided over US$2.8 billion in subsidies to United States firms in October 2022, attempting to “supercharge” the United States battery industry. However, the path ahead of the United States is fraught with challenges. Currently, Poland and Japan rank second in battery production and research, respectively. Biden’s promise of decisively triumphing over China and “winning the 21st century” appears idealistic: The United States and China compete in entirely different leagues. It would require investments of at least US$175 billion over the next three years to even begin challenging the Chinese Communist Party’s chokehold over the battery market. With the Biden Administration forced to concede spending cuts to avoid a congressionally imposed debt default, it is hard to imagine such sums materializing.
The lack of interest United States policymakers have in this field is worrying, given the battery’s paradigm-shifting potential. Chinese industry dominance is gouging cracks in the West’s containment strategy. For efforts to constrain China to succeed, batteries must be given the appreciation they deserve as part of any containment strategy.
First and foremost, significant investments into the United States battery industry are necessary for overturning China’s monopoly. The current US$2.8 billion in subsidies pales in comparison to the US$175 billion needed. Furthermore, United States policymakers should encourage more construction of local battery factories. Several key Chinese battery patents are expiring soon, and corporations like Tesla plan to seize this opportunity to bring manufacturing back to the United States. Policymakers should aid these attempts to shore up United States production. US citizens have the CHIPS Act; where is the BATTERIES Act?
Building a global battery supply chain independent of China must also be a priority for United States policymakers. China has monopolized the global minerals market, despite its domestic deficiencies in cobalt, lithium, and other metals through cunning diplomacy. For instance, Chinese corporations have purchased the majority of Congolese cobalt mines—oftentimes from their crowded-out United States counterparts—coming to control over 41 percent of the global cobalt supply. China similarly dominates the lithium, nickel, and other resource markets, thanks to its diplomatic effort in Australia, Indonesia, and other nations. The United States must bolster its diplomacy in resource-rich countries, regaining influence over the minerals that will power the future.
One method might be to invest in the local mining, refining, and recycling capacity of the Congo and other resource-rich nations. This would align the United States with the local population and resource nationalist governments, countering Chinese influence. Furthermore, with China refining over 50 percent of lithium, cobalt, nickel, manganese, and graphite—the core components of a battery—United States investments into refinery plants would remove a further layer of dependence on China. Constructing United States-backed battery recycling plants will also be critical for dismantling China’s monopoly. Projected to increase three-fold by the end of this decade, investment into battery recycling now could capture this explosive growth, providing an alternative solution for reducing reliance on a Chinese battery supply chain. Recycling just might enable the United States to leapfrog China to the next phase of the battery market.
Facing a Chinese monopoly over the technology powering the 21st century, United States policymakers must start recognizing batteries as the critical geopolitical consideration they are. No Taiwanese Wargame can be relied upon when Chinese-made Saft batteries power F-35s . No semiconductor trade war can be conducted successfully when United States chips rely on Chinese batteries. China powers the world. This is a geopolitical reality United States policymakers neglect at their own peril.
Written by Si Kai Feng
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