Japanese media admits: In this field, "China is 10 years ahead and cannot be easily caught up"
2024-08-18
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Reference News reported on August 16On August 14, the Nihon Keizai Shimbun published an article titled "70% of U.S. automotive batteries rely on Chinese imports". The full text is excerpted as follows:
It has been two years since the Biden administration in the United States enacted an industrial support bill aimed at achieving the localization of semiconductors and electric vehicles through huge subsidies. Although domestic and foreign companies have expressed their intention to invest in the United States, actual production remains stagnant.
In 2022, the Biden administration introduced two bills to counter the rise of China: the Chips and Science Act targeting semiconductors and the Inflation Reduction Act targeting electric vehicles and renewable energy equipment. The two bills received a total budget of about $500 billion.
Biden regards the practice of supporting industries through subsidies as the core of "Biden Economics", hoping to use subsidies as a lever to stimulate new demand and employment opportunities, but it is obvious that this idea is far from the actual situation of enterprises. Relevant investment plans are now obviously postponed, reduced in scale and suspended.
In the field of electric vehicles, Ford Motor Company of the United States has reduced the scale of its onboard battery factory in Michigan and postponed its electric vehicle production plan in Tennessee. South Korea's LG Group has also suspended its battery factory project in Arizona. As the sales of electric vehicles in the United States slow down, the earnings of manufacturers including Tesla have deteriorated, and it is obviously difficult to compete with Chinese electric vehicles.
In the semiconductor sector, TSMC's second Arizona plant has been delayed from 2026 to 2027 or 2028. Intel has also postponed its new Ohio plant project, which was subsidized. Semiconductor-related plans have also stalled due to a shortage of technicians and other talent.
Against this backdrop, the Biden administration’s plan to decouple its supply system from China may also face difficulties.
According to the U.S. Department of Commerce, 70% of U.S. lithium battery imports for electric vehicles and storage batteries came from China from January to June 2024. China's share has barely changed from 71% in 2023 and is much higher than 44% in 2020. Even after the Inflation Reduction Act was enacted, imports from China continued to increase.
In the past two years, the United States has also announced that it will significantly expand its renewable energy generation capacity such as solar energy. However, its domestic solar panel production plan has been delayed again and again, and it has to rely on imports. The scale of US imports from ASEAN has increased dramatically. However, Karen Hendrix, a senior fellow at the Peterson Institute for International Economics, pointed out that Chinese companies are "exporting in a roundabout way" through Southeast Asia to circumvent high tariffs.
Analysts believe that the support provided by the Chips and Science Act and the Inflation Reduction Act is not enough to support the "chain break" between the United States and China.
Alan Swan, head of Panasonic Energy North America, said that in terms of establishing a supply chain including battery parts and raw materials, "China is 10 years ahead and cannot be easily caught up." In the field of battery raw materials such as graphite and lithium, China still holds an overwhelming share in the global market.
As for semiconductors, the subsidies of the Chip and Science Act are mostly for large companies such as Intel, TSMC, and Samsung Electronics of South Korea. Many people believe that peripheral companies in the fields of raw materials and production equipment that are also indispensable to the entire production process have not received enough support. (Compiled by Li Ziyue)
