China tightens battery export controls, delays global shipments

New licensing rules will take effect as China supplies two-thirds of US battery imports.

China will require export licences for high-energy batteries, key materials and production equipment from 8 November, a move expected to lengthen export processing and delay overseas deliveries, S&P Global Ratings said.

The agency said China supplies about two-thirds of US lithium-ion battery imports, primarily for grid-scale energy storage and AI data-centre operations. The licensing rules will add administrative steps that could extend production lead times across non-Chinese supply chains dependent on Chinese inputs.

Analysts said the restrictions will affect manufacturers without alternative sourcing or domestic capacity. Japanese and Korean producers are expanding US facilities to qualify for Inflation Reduction Act incentives, whilst Contemporary Amperex Technology Co. Ltd. (CATL) is expected to prioritise non-US markets amidst ongoing US–China trade restrictions.

“US entities that lose access to Chinese supply will likely need to secure alternative suppliers to fill the gap,” said Stephen Chan, credit analyst at S&P Global Ratings.

The report added that without faster diversification of sourcing, non-Chinese markets face potential short-term price volatility and increased regional investment in local battery manufacturing within the next year.