Zeng Yuqun, chairman of China’s largest electric-vehicle (EV) battery manufacturer, has suggested that the Chinese government speed up “exploration and development” of lithium resources in the country to ensure supply chain security amid a global shortage of the rare earth metal as more people move to EVs. Zeng, chairman of Contemporary Amperex Technology Limited (CATL), included lithium development as one of his proposals submitted to authorities in his capacity as a delegate of the Chinese People’s Political Consultative Conference (CPPCC), the country’s top political consultative body. He said that lithium, the key metal used in the batteries that power EVs, must be included in China’s overall “national security” planning. According to a summary of his proposals published by CATL, China is facing a bleak supply and demand situation for lithium and the country must work harder to ensure its supply chain security. The Li-ion batteries that power electric vehicles from Tesla, VW and BYD “Lithium resources are the core raw materials of lithium batteries, and it is of strategic significance to understand and ensure the supply of primary products for these batteries,” wrote Zeng. CATL is now the world’s largest supplier of EV batteries thanks to Beijing’s encouragement of a domestic EV industry. CATL also provides batteries to US giant Tesla in China. The global competition for lithium, often referred to as “the new oil” and “white gold”, is set to intensify as major economies embrace a broad shift to EVs as part of efforts to combat climate change . According to International Energy Agency estimates, global demand for lithium is set to increase by more than 4,000 per cent by 2040 if the world achieves its climate goals. In China, the price of lithium has soared with the spot price surging more than 2 million yuan (US$316,000) per tonne last month – more than four times the price a year ago. The US, which aims to have electric vehicles make up half of the cars and trucks sold in the country by 2030, has also highlighted the importance of the metal as it seeks to cut reliance on China. How do EV batteries work, and why do they sometimes catch fire? Washington has said China’s dominance in lithium refining “ presents a critical vulnerability to the future of the US domestic auto industry”. China refines two-thirds of the world’s lithium and is currently the biggest buyer and investor in lithium mines around the globe, including Latin America and Australia, home to 64 per cent of the world’s known lithium reserves, according to the 2022 Mineral Commodity Summary from the United States Geological Survey. China announced last month that it had discovered a vast deposit of lithium in the region around Mount Everest. The ore deposit may contain as much as 1.0125 million tonnes of lithium oxide, according to a group of scientists from the Institute of Geology and Geophysics at the Chinese Academy of Sciences (CAS).