Steel For Fuel N° 030 of 56 9 Dec 2024
The geopolitics of electrification
by Andy Lubershane, Partner and Head of Research, Energy Impact Partners
In this note
The question
What does China’s rise to top passenger-vehicle exporter mean for energy geopolitics?
The answer
That electrification hands China the leverage hydrocarbons hand America. He ends on a question, not a conclusion: whether threatened tariffs turn cheap Chinese cars into a wedge between America and its allies.
03The argument
The chart shows China reaching the top of the passenger vehicle export table in very short order. Lubershane reads it as partly, not wholly, an electric story: nearly a third of those exports were electric in 2023 and rising, and electric vehicles are where he thinks China’s advantages over established automakers are biggest and most durable, resting on a battery supply chain it dominates at nearly every step while Europe’s flagship challenger files for bankruptcy. But the price advantage is not only electric. Manufacturing discipline, steady government support and a huge domestic market let Chinese firms undercut on combustion cars too. The step from there is his framing rather than anything in the chart: America wields fossil fuels, especially gas, China now wields clean energy manufacturing, and cheap electric exports are only the first way it might use that. The rest of the world, he says, appears to follow China’s adoption path more closely than America’s.
04What you need to know first
- Battery supply chain
- The manufacturing steps from raw materials to finished cell; his dominance claim is about each step.
05Details worth keeping
- The chart and anecdote are both Michael Dunne’s.
- The European counterexample is Northvolt’s bankruptcy, quoting Intercalation Station that battery production is genuinely difficult.
- The adoption comparison and the Indian three-wheeler exhibit sit in charts; neither number is in the text.
06Claims worth citing
All figures as stated on 2024-12-09.
- Nearly a third of China’s vehicle exports were electric in 2023, and rising. US International Trade Commission, cited by Lubershane
- China controls 70 to 90% of global supply at nearly every step of the lithium-ion battery chain. Lubershane
- Average Chinese vehicle export price about $19,000, under half the American and European average. Lubershane
- A Chinese supplier quoted $8,000 for a Ford Territory replica; the dealer sells the real one starting at $32,000. a Bangkok car dealer, recounted by Dunne
07Where it’s contested
Nobody pushes back. He marks the geopolitical reading as his own argument rather than a finding. The American half of the comparison rests on a claim he says he made recently and does not restate here. Nothing tests whether export volume converts into influence, which is the load-bearing step.