On 9 October, China’s Ministry of Commerce and the General Administration of Customs jointly announced the decision to implement export controls on lithium battery and manufactured graphite anode material-related items. The announcement will officially take effect from 8 November 2025.

The export-control categories cover several key areas of the lithium battery industry chain, including specific types of battery cells, cathode materials, and core production equipment.

For the cathode sector, the scope of controls is focused on high-performance and high-energy-density cathode materials. This includes lithium iron phosphate (LFP) cathode materials with a compaction density of 2.5g/cm³ or more, a standard that covers nearly all mid-to-high-performance LFP materials. Ternary precursors, which remain widely used in mid-to-high-end power batteries, have also been included in the list.

Finally, the export controls incorporate lithium-rich manganese-based cathode materials. Due to their high energy density and high voltage, lithium-rich manganese-based cathode materials are considered to be one of the most promising cathode materials for future solid-state batteries.

Some core equipment for producing cathode materials has also been included in the controls, including roller hearth kilns, high-speed mixers, sand mills, and airflow crushers. These devices represent core machinery in several key production stages of cathode materials and have a significant impact on the performance and yield rate of the final products.

Overall, for the Chinese market, these export-control regulations target only high-performance battery materials and equipment and do not affect the flow of standard products. Furthermore, the policy only implements controls, not a ban; theoretically, in the short term, compliant manufacturers can still export these materials.

However, in the long run, the measures benefit those manufacturers currently building factories overseas, as establishing local offshore production capacity and supply chains to circumvent the controls could help expand their overseas market share. It may also stimulate and direct investment from Chinese players into building facilities overseas, rather than supplying equipment to build domestic manufacturing.

For overseas markets, this announcement represents a preventative measure implemented by the Chinese government, based on protecting domestic advanced technology and preventing technology outflow, whilst still retaining space for foreign cooperation. This also provides China with leverage in its strategic bargaining with the USA at the upcoming Asia-Pacific Economic Cooperation (APEC) summit. If the two sides can reach some cooperation, this flexible design also allows room for moderation in the control of critical materials.

In the short term, it will somewhat affect the supply of high-end battery materials overseas, impacting the expansion of mid-to-high-end lithium batteries in ex-China markets. In the long term, it is likely to drive technological innovation in overseas markets and enhance the competitiveness of their local industrial chains.