CX Daily: The World’s EV Supply Chain Is Fracturing

Long dominated by China, the global lithium industrial chain is breaking up into independent European, American and China segments

Mar 06, 2023

Trucks and tractors transport the raw material extracted from the salt recovery pools to be processed in the lithium pilot plant at the Llipi pilot plant in the Uyuni Salt Flats on Aug. 13, 2022, in Uyuni, Bolivia. Photo: VCG

Electric cars /

In Depth: The world’s EV supply chain is fracturing

Chinese makers of electric vehicles (EVs) and batteries are bracing for a sweeping restructuring of the global lithium industrial chain long dominated by China.

Since the pandemic and Russia-Ukraine war heightened energy security concerns, the U.S. and the European Union are taking steps to create their own EV supply chains in the spirit of “the closer, the safer.” The shakeup means costs will rise, driving dramatic changes in sourcing of raw materials and labor, which is likely to benefit places like Indonesia.

“China, Europe and the U.S. will form three relatively independent regional markets with corresponding industrial chains,” Teng Yong, a global partner at consulting firm A.T. Kearney, told Caixin.

Lawyers /

China’s top prosecutor makes consulting defense lawyers mandatory before arrests

New guidelines requiring prosecutors to seek the opinions of defense lawyers before issuing an arrest warrant are an effort to ensure that the often-sidelined lawyers are heard during the judicial process, legal experts said.

On Thursday, China’s top prosecutor released a 10-point judicial interpretation laying out opinions to protect lawyers’ rights.

FINANCE & ECONOMY

Last year, China logged its second-lowest growth rate in more than four decades at 3%, missing the government target of around 5.5%. Photo: VCG

Economy /

China expected to set GDP growth target of around 5% at ‘Two Sessions’

China is expected to announce a GDP growth target of around 5%, along with pro-growth but prudent macroeconomic policies, during the “Two Sessions” Sunday, analysts with domestic and overseas financial institutions said.

Policymakers have sent strong signals that they will prioritize stabilizing growth this year, which, along with the pivot from stringent Covid controls, has prompted the International Monetary Fund and a number of global financial institutions to raise their 2023 growth forecasts for China, mostly putting the rate at 4.8% to 5.6%.

NPC preview: Supporting growth as the top priority

PMI /

China services sector further improves as Covid wave subsides, Caixin PMI shows

Activity across China’s services sector expanded at the fastest pace in seven months in February with supply, demand and employment all improving as Covid-19 infections subsided, a Caixin-sponsored survey showed Friday.

The Caixin China General Services Business Activity Index, which gives an independent snapshot of operating conditions in services industries such as retail and travel, rose to 55 in February — a high not seen since August 2022 — from 52.9 the previous month. Readings above 50 signal expansion.

The Caixin China General Composite PMI, which comprises manufacturing and services, came in at 54.2, up 3.1 points from the previous month.

Quick hits /

Caixin New Economy Index falls on declining labor inputs
China swap traders flip to bet on higher rates on growth rebound

BUSINESS & TECH

New-energy vehicles (NEVs) are the main driving force for rare earths demand.

Rare earths /

Rare earth stocks plunge as Tesla seeks alternatives

Shares of Chinese rare earth suppliers plunged Thursday after Tesla Inc. said it will reduce its use of the minerals in future electric vehicles to control costs.

The leading electric-car maker is designing next-generation powertrains that will use a permanent magnet motor that doesn’t rely on rare earth materials, Colin Campbell, Tesla vice president for powertrain engineering, said at an investor meeting. The change reflects Tesla’s efforts to control material costs and reduce its involvement in the health and environmental risks of mining the minerals, Campbell said.

Autos /

Chinese governments roll out incentives for car buyers

Multiple Chinese cities rolled out policies to boost vehicle purchases after car sales slumped at the start of this year.

From Jan. 1 to Feb. 19, China’s passenger car sales fell 26% from the same period last year, according to data released Wednesday by the China Passenger Car Association (CPCA). Sales of passenger new-energy vehicles (NEVs) increased 9% to 546,000, meaning sales of fossil-fuel passenger cars declined more than 30% during the period. NEVs include purely battery-powered cars and electric-gasoline hybrids.

Luckin Coffee /

Luckin Coffee turns first annual profit

Starbucks challenger Luckin Coffee Inc. turned a full-year operating profit in 2022 for the first time, despite being hit by Covid-19 lockdowns in the fourth quarter.

The coffee chain’s operating profit last year reached 1.16 billion yuan ($168 million) with a margin of 8.7%, bouncing back from a loss of 539 million yuan in 2021, according to the company’s earnings report released Thursday. Revenue surged 66.9% year-on-year to 13.3 billion yuan in 2022.

Quick hits /

Henan moves to consolidate struggling steel sector
Australia knocks back China-linked investment in rare earths
China’s Big Fund makes a big splash with $1.9 billion chipmaker investment

Tech Insider /

U.S. reviews Huawei export licenses, Bilibili shrinks losses