New Delhi, May 10: China is currently leveraging its grip on critical minerals essential for New Energy Vehicles (NEVs) to gain a geopolitical advantage. Its strength lies in the ability to influence or disrupt the global supply chain.
According to an article published in ‘The Diplomat’, this advantage may diminish in the future as Western countries rapidly advance in new technologies. Companies like Tesla are making significant strides in new battery technology and autonomous vehicles.
The article states that China currently holds a dominant position in the NEV manufacturing sector, which presents a genuine opportunity for long-term competitiveness. However, sectors like semiconductors and robotics, while prestigious, still see China lagging behind on the international stage.
Despite the rapid growth of China’s NEV sector, advancements in technology from Western nations could render the existing NEV supply chain obsolete. The article emphasizes that new battery technologies will determine who controls the upgraded market in the future.
Moreover, competition is intensifying over integrated manufacturing costs. Previously, Chinese manufacturing had a cost advantage, but Tesla is reducing costs through its high-density production lines, posing a significant challenge to China’s NEV manufacturing.
Tesla is also leading in driverless vehicle technology, described in the article as a “revolutionary change.” These three technological advancements are seen as potential threats that could weaken or render ineffective China’s current supply chain strategy.
According to the article, considering average industrial cycles, it is estimated that China has only three to five years to maintain its edge in certain segments of the supply chain. If China fails to implement substantial and impactful technological changes, this opportunity may be limited to a short timeframe.
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