This is one of the defining competitive fields of our time: countries that can produce batteries For electric vehicles they will have decades of economic and geopolitical advantage.

So far, the only winner of the EV battery competition is China. Although Western economies have invested billions, China is leading the way in mining rare earths, training engineers and building colossal factories. It will take decades for the rest of the world to catch up. Even in 2030, China will produce twice as many batteries as all other countries, according to the consulting firm Benchmark Minerals.

Let’s take a look at how China controls every stage of lithium battery production, from extracting raw materials from the ground to building vehicles, and why it will maintain an advantage for a long time. Electric cars use six times more rare metals than conventional ones due to batteries, and China decides who gets those metals first and at what price.

China’s underground reserves of important ingredients are relatively small, but it has adopted a long-term strategy to secure a stable supply of these raw materials at low prices. With government help, Chinese companies have bought stakes in mines on five continents. China controls most of the cobalt mines in the Congo, which holds most of the rare metal needed for the most common type of battery. American companies could not stand the competition and went so far as to sell their mines to Chinese competitors.

Even in 2030, China will produce more than twice as many batteries as all other countries.

Thus, China controls 41% of the world’s cobalt production and most of the production of lithium, the material that carries the electrical charge in batteries. The world’s reserves of nickel and graphite are much larger, and much fewer batteries are needed. But China has a stable supply of these metals, which gives it an advantage. Its investment in Indonesia will help it control most of its nickel by 2027, according to consulting firm CRU Group. After all, most graphite mining takes place in China.

Western countries also have mines in other countries and are trying to get to China. But they don’t want to invest their money in countries with unstable governments or without labor rights. And they are too late to increase their production. It could take more than 20 years for a new mine to reach full capacity. And while the US is investing in securing a significant supply of lithium, those efforts have become mired in a number of environmental issues and disputes between local communities.

Regardless of who is involved in the mining of metals, almost all of them are sent to China, where they are processed and turned into raw materials suitable for the production of batteries. Once the iron ore is out of the ground, it is often crushed and then subjected to thermal and chemical treatments to separate the components of interest. The process generates a huge amount of waste, and recycling requires a huge amount of energy.

The production of battery metals requires three to four times more energy than the production of steel or copper. For example, the preferred form of lithium is that it will be heated, steamed and then dried.

Thanks to government support, cheap energy and land, Chinese companies have been able to process large volumes of metals and at a lower cost than anyone else. Thus, they forced the processing plants of other countries to close. After all, recycling pollutes the environment, and Chinese companies also benefit in this sense, since China has more lenient environmental protection rules.

Graphite processing causes air pollution. Nickel produces toxic waste that must be stored in facilities either in the ocean or underground. And experts say that if more environmentally friendly methods are used to process battery metals, their cost will increase. Today, the United States has very limited processing capacity for these metals. It takes from two to five years to create a metalworking production.

Training of employees and adaptation of equipment will take more time. Australia’s first lithium processing plant, also partly owned by a Chinese company, was approved in 2016 but did not produce lithium suitable for batteries until last year.

Low manufacturing costs, advanced technology and $130 billion in research

China has been able to become a leading power in battery manufacturing in part because it has figured out how to produce battery components efficiently and at low cost. The critical component is the cathode electrode, the positive electrode, which is the most complex and energy-intensive of all battery components. However, China has invested in a cheaper cathode substitute, which currently occupies half the market. It’s called LFP and it’s cheaper because instead of nickel and cobalt, it uses mostly iron and phosphate, which are in abundance.

The LFP will offer Western countries a way out of the difficulties they face in order to secure supplies of the metal. But China produces almost all the LFPs in the world. Only 1% of cathode electrodes are produced in the USA today. American companies are interested in LFP, but they need to work with Chinese companies with experience in its production. And Chinese companies also produce most of the other battery components.

Most electric vehicles drive on the roads in China, and almost all of them use Chinese-made batteries. In 2015, Beijing implemented a series of measures aimed at blocking foreign competitors in the industry while boosting consumer demand. Chinese battery makers such as CATL and BYD have experienced significant growth at the expense of their competitors in Japan and South Korea and have thus become the world’s largest.

Today, eight years later, the Biden administration is attempting a similar strategy for battery development in the US. But because it is a sector with huge capital expenditures and low profit margins, Chinese companies have an advantage after years of government subsidies and experience.

According to Heiner Heims, a professor at RWTH Aachen University in Germany, China is building battery factories at almost half the cost of their counterparts in North America and Europe. The main factor is the low cost of labor and the abundance of equipment manufacturers in China. American investors do not want to invest in electric vehicles.

Conventional cars are still profitable, while American workers will have to learn and acquire new skills, as well as incentives provided by the government. Biden to support the electric car industry may disappear with a change of government. China has spent more than $130 billion on research initiatives, government contracts and consumer subsidies, according to the Center for Strategic and International Studies.

China offers tax breaks, lower car registration fees and discounts on parking options, as well as gas stations for those who buy electric vehicles. As CSIS consultant Scott Kennedy emphasizes, “without cooperation with China, it is impossible to succeed in the production of electric vehicles.”