China’s Battery Material and Equipment Export Contorls – What it Means for India

China has announced new export controls that will take effect on November 8, 2025. Among controlled items are lithium-ion battery cells and battery packs with a gravimetric energy density exceeding 300 Wh/kg, various cathode materials and their precursors, artificial graphite anode materials and related production equipment and technology. This puts the focus on a few companies, like Epsilon Advanced Materials, working to build capacity to deliver battery-grade CAM and anode materials ex-China. Mr Vikram Handa, Managing Director of Epsilon Advanced Materials, shared his views on this development.

Could you please share a brief note on Epsilon Advanced Materials’ current CAM and anode manufacturing capabilities, status, and locations in India and globally?

We commissioned India’s first graphite anode qualification & commercial plant in Bellary, Karnataka, in early 2024. The scale-up facility will produce 30,000 tons by 2027 with 100,000 tons by 2030. We have also received all pre-construction permits for our North Carolina, USA facility with 60,000 tons of graphite anode by 2030.

Our Cathode Technology Centre in Germany is an advanced R&D facility with a 250-ton commercial demonstration plant, the largest LFP cathode facility outside China. This centre holds over 120 patents, and we are developing next-generation cathode materials with advanced cell testing work. In India, we plan to commission the country’s first LFP Cathode Active Material (CAM) manufacturing plant by 2028 with an initial capacity of 30,000 tons, scaling up to 100,000 tons by 2031.

All these plans are to support our mission for the global battery supply chain and contribute to sustainable energy solutions. Both of our anode & cathode material is qualified with cell makers & auto OEMs in India, the US and the EU and we should close on an offtake soon to enable a secure & reliable supply chain outside China.

Many reports say that China controls 99% of the graphite anode market and over 80% of cathode material manufacturing at present. Is that a correct assessment of China’s current control on the battery value chain?

Yes, that’s correct. China has done commendable work in the last 20~25 years in mining, battery material processing & battery manufacturing, hence their dominant position is obvious. We need to learn a lot from China on how the government incentivised everyone to integrate both upstream & downstream so as to create a resilient ecosystem that allowed everyone to thrive not only in the domestic market but has also been enjoying a highly skewed global leadership position.

Their recent export restrictions on battery materials, machinery and its technology is an indicator and explains why business and government needs to build ex-China capacity and supply chain through focused policies. Because a policy, incentive, or subsidy made for cell makers might not work for battery material producers like us. Many companies are now building their capabilities; however, we need binding offtakes & agreements from downstream industry which can make these innovations & investments feasible and practical.

How do you see China’s latest export control announcement involving advanced batteries, production equipment, cathode materials, and artificial graphite anode materials, along with related production equipment and technology? 

After the rare earth metal ban, this kind of ban was seen coming. China’s export sanctions safeguard their interest to not let their innovation & technology be sold outside and dilute their market dominance. They have done huge investment in the whole battery supply chain over decades and giving know-how to other countries like India can shift the market dynamics soon.

The restrictions raise concerns for cross-border transfers of high-end battery cells, key upstream inputs, and machines. Operationally, it will compel buyers and OEMs to reassess sourcing risk, accelerate localisation plans, and fast-track qualification of alternative suppliers outside China. In short, it’s a wake-up call that supply-chain resilience is now a front-line commercial priority.

Given that these are not export prohibitions but license mandates, why should the move be a cause of concern for the global battery companies?

License requirements may sound less severe than outright bans, but they materially increase commercial friction and execution risk. Licenses create additional lead times, uncertainty about approvals and the possibility of case-by-case denials or restrictive conditions. For high-volume manufacturing, even short lead-time disruptions can derail project timelines, qualification schedules and finance assumptions. I believe license regimes has unpredictable gating points into a supply chain that until now relied on relatively frictionless cross-border trade and that unpredictability can translate into higher costs, slower ramp-ups and high execution risk for Indian & global battery makers.

Export control also extends to production equipment for CAM and graphite anodes. How do these restrictions impact ex-China CAM and anode manufacturing companies like Epsilon?

For ex-China manufacturers, controls on equipment can raise two operational challenges. Certain downstream lines and high-precision machines sourced from China may now face licensing hurdles or supply delays, which may complicate procurement and commissioning schedules. Also, the transfer of associated technology and know-how may become slower or subject to approvals, which can lengthen qualification cycles.

That said, this also creates an opportunity to invest in non-Chinese equipment suppliers, incentivise partnerships with global OEMs of critical machinery, and increase the commercial value of products from companies like Epsilon that can deliver qualified, locally sourced CAM and anode materials. Practically, companies must diversify equipment suppliers, build strategic inventory buffers for long-lead items, and accelerate local engineering and process development to reduce dependence on any single geography.

What steps does Epsilon plan to take to secure equipment procurement for its facilities, as well as speed up the race to deliver production-ready battery materials on a mass scale?

Our steps are multi-pronged and pragmatic. We are qualifying alternate equipment vendors across India and Japan, so single-source risks are minimised. We are strengthening engineering and machine-integration capabilities locally and forming strategic JV/technology partnerships to internalize critical process steps. Parallel qualification tracks with cell manufacturers (pilot → pre-commercial → commercial) have now shortened via feedback loops, sample exchanges and testing. We are working closely with industry bodies and the government to ensure predictable trade and investment frameworks that support the rapid commercialisation of ex-China supply.

Any other information you would like to share on the subject?

Two closing points from my end. First, the lessons learnt from China’s restrictions must accelerate our energy security and supply-chain resilience for the whole battery value chain and not just procurement checkboxes. Governments, investors and industry must accelerate coordinated action to build local processing, incentivize equipment manufacturing, and expand recycling and secondary-materials ecosystems.

Second, the challenge is surmountable with focused capital, policy support and cross-border partnerships. We must create a diversified, reliable supply chain outside China within the next 3~5 years so that companies like us, who are committed to being part of that solution, can survive & thrive.

Also read: Epsilon acquires German LFP Cathode Tech Center | Plans to establish manufacturing plant in India