Green energy war: dominant Chinese exporters of EVs, batteries and solar panels face trade barriers, Natixis says
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- Outlook is less rosy, given signs of a domestic market slowdown and rising trade barriers overseas, Chief Economist Alicia Garcia-Herrero tells the Post
China’s global dominance in the production of three key energy transition products – electric vehicles (EVs), batteries and solar panels – will face more challenges this year from industry overcapacity, price wars and trade barriers, French bank Natixis said.
Export growth of these “new three” sectors, a term coined a year ago by Chinese state media to describe the three rising stars of mainland Chinese exports, will run into constraints after the country saw the value of EV exports nearly quadruple to around US$38 billion last year from two years ago, analysts at the French bank said.
Meanwhile, solar panel exports rose by around 40 per cent to US$42 billion and battery exports more than doubled to US$66 billion over the same time frame. Together, they account for 4.5 per cent of China’s total exports currently.
“China’s dominance will be challenged by industrial policies and tariffs globally, which do not only come from the West but also other countries, such as India and Turkey,” the Natixis analysts said in a report.
“The world will face a question of balancing cost-effective green transition goods from China and supply-chain security.”
By establishing first mover advantage through aggressive capacity expansion supported by subsidies, tax incentives and build out of full supply chain capabilities, China has dominated the production of various manufactured goods needed for the green energy transition, they added.