Source: Christopherchico
China manufactured enough lithium-ion cells in 2023 to supply its entire domestic EV market 4.5 times over, yet nearly 80% of that capacity shipped abroad. The country flooded global supply chains while failing to absorb its own production. This overcapacity forces Chinese battery makers like CATL and BYD to chase international contracts at margin-crushing prices, destabilizing battery costs worldwide and making it nearly impossible for non-Chinese competitors to operate profitably. The math exposes a genuine vulnerability: if China's EV sales plateau or its export markets tighten via tariffs or local production requirements, gigawatt-scale capacity goes idle. The outcome is binary—either a price war that collapses the entire battery industry or forced consolidation that further concentrates Beijing's control over critical materials supply chains.