Foreign Policy/Security: Considering China’s growing dominance in EV exports and the associated demand for critical minerals, evaluate the geopolitical and energy security implications for countries increasingly reliant on these imports. Analyze the strategies that nations could adopt to mitigate risks from potential supply disruptions or market manipulations by dominant exporting countries, especially in the context of the rising global demand for EVs. Examine how this dynamic influences international relations and the strategic positioning of nations in the global energy transition.
Executive Summary:
China’s expansion in the global EV market is reshaping energy security dynamics, just last year it surpassed Japan to become the top exporter of automobiles in the world. We’ll be exploring the demand in critical minerals that’s affected in this upcoming tide.
Key Takeaways:
Chinese EV manufacturing are driving a surge in global demand for critical minerals. Energy security now hinges on diversified, stable mineral supply chains as China is securing mineral mines all over the world. Strategic international partnerships are crucial to address potential supply monopolies.
Introduction:
Last year, 2023, China officially dethroned Japan and became the top automobile exporter in the world, selling over 5.3 million cars overseas, of which more than 1.7 million units were new energy vehicles. This is very important as it signatures the move for China to step up in the international scene as more than just a manufacturing country but a more high-end economy capable of advanced research and development. The development of EVs also require an update in the basic infrastructure and more careful urban planning for charging stations and deployment of electricity.
These freshly exported vehicles parked in foreign major ports waiting to be picked up by local dealers are given high hopes by the nation as a name card in the post-COVID era. China has become another mysterious country during the pandemic lockdown and outsiders rarely knew what was truly going on, it is also during this time when a fierce competition happened inside the country, a “involution” of carmakers which favored the consumers of course. The Chinese EV industry is criticized by the EU and now the US for heavy government subsidy that could disrupt the indigenous market, although the subsidy in China is going away as the market matures and competition cools down. On the other hand, the growth trend in export of Chinese EVs and combustion engine vehicles seems unstoppable as more markets start to acknowledge and become familiar with the brands and their super competitive products.
As Chinese companies secure their upper and lower supply chains through M&A of large lithium, nickel, cobalt and copper mines, other countries and EV manufacturers should also look into that to minimize the risks. Therefore, we will be taking a deeper dive into how the demands of EV related materials would rise in the upcoming years.
Main Body
Body Paragraph 1:
China’s rising influence in EV export on the global market
The following objects are masked from 'package:stats':
filter, lag
The following objects are masked from 'package:base':
intersect, setdiff, setequal, union
library(tibble)library(ggplot2)library(here) # for using relative file paths
here() starts at /Users/shenyuhao/Desktop/JHU SAIS/Spring/Sustainable Finance/Paper 2
library(esquisse)# Load the datasetchina_export_data_ev <-read_excel("~/Desktop/JHU SAIS/Spring/Sustainable Finance/Paper 2/data/statistic_china_export.xlsx", sheet ="Data")
New names:
• `` -> `...2`
• `` -> `...3`
# rename columnscolnames(china_export_data_ev)[2:3] <-c("percentage", "unit")#Creating Graphggplot(china_export_data_ev) +aes(x =`Share of passenger car exports in the production output in China 2010-2021`,y = percentage ) +geom_col(fill ="#112446") +labs(x ="Year",y ="Percentage %",title ="China EV Export Share Trend",caption ="Made by Yuhao Shen" ) +theme_minimal()
The graph shows a general increasing trend in the share of Chinese electric vehicles (EVs) in world’s total automobile exports from 2010 to 2021. Starting from below 2% in 2010, reaching a first stage high in 2012, then slides down until it rises again from 2016, finally reaching a peak of over 6% in 2021. This upward trend highlights China’s growing influence in the global EV market and aligns with the country’s push towards becoming a leader in high-end manufacturing and sustainable technologies. The sharp increase particularly from 2020 to 2021 suggests a significant acceleration in China’s EV exports, likely driven by advancements in technology, increased production capacity, and growing international acceptance of Chinese EV brands. This graph serves as a quantitative reflection of China’s strategic shift towards exporting higher-value products and its role in shaping the global automotive landscape, especially in the post-COVID era where sustainability is becoming increasingly important.
Body Paragraph 2: The critical minerals: cobalt and copper
# Load the cleaned datasetpath_to_sheet <-here("data", "iea_ev_demand_for_minerals.csv")path_to_sheet
Rows: 1596 Columns: 6
── Column specification ────────────────────────────────────────────────────────
Delimiter: ","
chr (4): case_mineral_needs, mineral_name, scenario, unit
dbl (2): year, value
ℹ Use `spec()` to retrieve the full column specification for this data.
ℹ Specify the column types or set `show_col_types = FALSE` to quiet this message.
our_cleaned_data_ev
# A tibble: 1,596 × 6
case_mineral_needs mineral_name scenario unit year value
<chr> <chr> <chr> <chr> <dbl> <dbl>
1 STEPS - Base case Copper Current Year kilot… 2022 373.
2 STEPS - Base case Copper Stated policies scenario kilot… 2025 580.
3 STEPS - Base case Copper Stated policies scenario kilot… 2030 1044.
4 STEPS - Base case Copper Stated policies scenario kilot… 2035 1219.
5 STEPS - Base case Copper Stated policies scenario kilot… 2040 1421.
6 STEPS - Base case Copper Stated policies scenario kilot… 2045 1458.
7 STEPS - Base case Copper Stated policies scenario kilot… 2050 1346.
8 STEPS - Base case Copper Announced pledges scenario kilot… 2025 689.
9 STEPS - Base case Copper Announced pledges scenario kilot… 2030 1592.
10 STEPS - Base case Copper Announced pledges scenario kilot… 2035 2570.
# ℹ 1,586 more rows
# Graph showing rising demand in Cobalt and Copper in the coming yearsour_cleaned_data_coco <- our_cleaned_data_ev %>%filter(mineral_name %in%c("Copper", "Cobalt")) %>%group_by(year)ggplot(our_cleaned_data_coco) +aes(x = year, y = value, colour = mineral_name) +geom_point(shape ="circle", size =1.5) +scale_color_hue(direction =1) +scale_y_continuous(trans ="log10") +labs(x ="Year",y ="Demand in Kilotons",title ="Copper and Cobalt Demanded ",caption ="Made by Yuhao Shen",color ="Mineral Name" ) +theme_minimal() +facet_wrap(vars(case_mineral_needs))
The second graph portrays projected demand scenarios for these minerals in electric vehicle (EV) production up to the year 2050. It breaks down projections under different technological and market scenarios including “Constrained nickel supply,” “Faster uptake of solid-state batteries,” and “Limited battery size reduction.” These scenarios affect the use of cobalt and copper differently. For instance, developments like smaller batteries or more efficient battery technologies could reduce the demand for these minerals. Conversely, scenarios like the base case (“STEPS”) show a more steady demand, indicating ongoing reliance on these materials as key components in EV batteries. Each scenario reflects different potential advancements and market conditions, impacting how much cobalt and copper will be needed in the future. However, in all cases, we can see the drastic increase in the demand for both cobalt and copper as they are essential for EV production, which again echoes the need for policy makers to ensure their home country and manufactures would have derisked access to these critical minerals. A possible policy apart from government issued subsidies directly to the manufacturers would be to support the allocation and purchasing of these mines around the world so that the price of batteries - the most price sensitive and important component of EVs - would be stable.
Body Paragraph 3: Mineral Demand
our_cleaned_data_ev %>%filter(!(scenario %in%"Current Year")) %>%ggplot() +aes(x = year, y = value, colour = mineral_name) +geom_point(shape ="circle", size =1.5) +scale_y_continuous(trans ="log10") +labs(x ="Year",y ="Demand in Kilo Tons (KT)",title ="EV Production Under Different Scenarios",caption ="Made by Yuhao Shen",color ="Minieral Name" ) +theme_minimal() +facet_wrap(vars(scenario))
The demand for minerals crucial to electric vehicle (EV) production is forecasted to grow significantly under various future scenarios, as depicted in the graph. This chart illustrates the projected kiloton demand for essential minerals like cobalt, copper, lithium, and rare earth elements (e.g., neodymium, dysprosium) across different timeframes and policy contexts, including the “Announced Pledges Scenario” and the “Zero Emissions by 2050 Scenario.” The escalating demand reflects the anticipated expansion in EV production, driven by global efforts towards carbon neutrality and enhanced energy security. Each scenario suggests varying levels of mineral need, indicating how policy direction and technological advancement could shape resource requirements. This data underscores the strategic importance of these minerals in achieving sustainable transportation goals and the potential supply challenges that may arise if demand outpaces available resources. And it will be important for companies and countries to strategically allocate these resources.
Conclusion:
The trajectory of mineral demand for EV production points towards a future where strategic resource management and policy-making will be crucial. Addressing these needs proactively will not only support the automotive industry’s shift towards electrification but also contribute to broader environmental goals. As such, stakeholders across industries and governments are called upon to collaborate in fostering a sustainable and efficient supply chain that can meet future demands.
