A Supply Chain Wake-up Call: China’s Battery Technology Export Controls
As of November 8, 2025, China will impose export controls on lithium battery technology, targeting high-energy lithium-ion batteries (with a capacity of >300 Wh/kg), critical materials, and advanced production equipment, sending shockwaves across sectors that rely on lithium batteries.
These moves send a strong signal to global supply chains. Reliance on Chinese battery value-chains is no longer just a business risk — it’s a geopolitical one. It’s like the OPEC embargo all over again.
The export controls will significantly impact product builders, system integrators, and operators who depend on specific cell types and battery formats. It’s not only higher prices — whether you can procure the cells you need when you need them has become a big question mark that will grind operations to a halt.
Let’s explore how these expert controls impact the supply chain, how you may adapt, and how software-defined batteries (SDBs) provide agility and resiliency to future-proof your operations.
How China’s battery technology export controls impact the global supply chain
What do these controls mean for product manufacturers who rely on the complex global supply chain? Unfortunately, for many, it’s time to brace for impact.
Cell and material sourcing risks
Traditional battery technologies require product designers and builders to commit to specific cell chemistry, format, and type (too) early in the development process. Changing supplier and cell format often means going back to the drawing board and redesigning the architecture.
China’s export controls increase sourcing risks for existing designs that require high‐density cells. Even if it doesn’t cut off the supply immediately, the licensing process would likely add lead time and uncertainty, making forecasting and strategic planning extremely challenging. Additionally, companies will likely face increased costs due to higher licensing fees and a greater documentation burden.
For product manufacturers who have designed their entire system around a specific cell type or chemistry from Chinese suppliers (e.g., 300 Wh/kg+ lithium-ion cell), the lack of alternative vendor options becomes a constraint and threat to operational continuity and profitability.
Increased costs and project delay risks
Traditional battery engineering approaches require companies that produce or operate multiple battery-powered equipment to stock various battery packs, each for a single model. The lack of modularity may cause increasing costs and availability challenges in procuring spare cells and replacement modules to keep an entire fleet operational.
Companies must hedge risks in the face of supply chain uncertainty, resulting in higher inventory buffer requirements, dual-sourcing premiums, and obsolete stock. Meanwhile, if manufacturers can’t source critical components, such as cathode or anode materials, due to licensing delays, entire production lines may pause or slow down.
Additionally, the increased costs required to install and operate energy storage systems and grid battery installations could impact power-intensive applications, such as data centers.
Dependency concentration and geopolitical risk
China not only manufactures most of the world’s lithium iron phosphate (LFP) cells. It also owns the technology to do so. The new policies are part of its strategy to consolidate advantage in critical minerals and processing while using export controls as a strategic lever.
What does that mean for OEMs and system integrators? Supply chain resilience is no longer just about lining up multiple mines or cell vendors. They must also avoid chokepoints controlled by a single country or regulatory regime.
What about moving to new battery chemistries? Unfortunately, that’d be a long and expensive adoption journey because traditional battery technology requires equipment to be designed specifically for one cell type. It does not allow the mixing of cells of different chemistries and ages to orchestrate a gradual and low-cost transition.
Strategies to adapt to China’s battery expert controls
Map your supply chain exposure and determine the controls’ impacts on cell, module, cathode/anode material, and equipment sourcing. Then, quantify lead time, identify licensing risks, and line up alternative sourcing options. Also, review contracts to understand your rights in the event of export license delays or denials.
Plan for supply chain diversification. In addition to seeking alternative non-Chinese suppliers (which may or may not be feasible), negotiate for transparency on export license risks, supplier contingency plans, and alternative sourcing fallback.
Explore ways to build flexibility into your battery system architecture, such as adopting a pack architecture that allows for multiple cell supplier options and modular substitution. Moreover, implement battery software technology that enables you to adapt to different cell internal characteristics on the fly, so you can use cells from different suppliers.
Operators managing large installed bases of battery packs should move toward modularity and prioritize serviceability to ensure long-term agility and profitability. For example, you may design or upgrade your systems for spare-module interchangeability across cell vendors and chemistries.
The ability to implement new or alternative battery chemistries or sources is key to enhancing adaptability and navigating supply chain challenges. However, traditional battery technology does not allow for such agility. The good news is that software-defined batteries (SDBs) offer the much-needed capabilities to address the supply chain challenges.
Enhance agility and resiliency with SDBs
SDBs built on the Tanktwo Battery Operating System (TBOS) offer the flexible architecture you need to mitigate supply chain risks and gain a competitive advantage.
Flexibility in the hardware layer
SDB systems decouple the battery architecture from specific cell suppliers/chemistry. You can design a product that accepts various cell formats or chemistries from different suppliers without any hardware update.
The flexibility prevents vendor lock-in. When access to a source is constrained, you can cost-effectively switch to an alternative supplier or chemistry on short notice, reducing the risk of chokepoints or bottlenecks in your supply chain.
Faster adaptation and diversification
TBOS enables operators to mix cells of different types, chemistries, and ages without equipment redesign or extensive downtime. This adaptability helps shorten time-to-market when you need to source alternative cells during a supply-chain disruption.
You can also implement a dual-sourcing strategy or multi-chemistry contingencies. As a result, you’re better positioned to pivot to alternative sources or distribute sourcing across geographies to hedge against geopolitical uncertainty.
Maximize asset lifespan and resource usage
Traditional battery technology often requires operators to discard an entire battery pack when only one module or cell fails. On the other hand, SBD’s ability to mix cells of different chemistries and ages means you can replace one failed unit without tossing others, minimizing wastage.
TBOS's Lifecycle Index™️ provides visibility into an individual cell’s state of health (SoH). The granular insights make many second-life applications operationally and financially feasible, maximizing asset lifespan and revenue generation opportunities. Meanwhile, our yellow-flagging capabilities enable just-in-time, instead of just-in-case, maintenance to extend each cell’s useful life.
Reduced carry cost and lower obsolescence risk
TBOS enables a modular approach to battery pack design. You can stock just a handful of battery modules and combine them to meet various requirements, simplifying spare module procurement and field replacement.
For operators managing large fleets of battery-operated equipment or vehicles, the modularity translates into reduced risks of stranded spares, financial exposure to component shortage, or forced redesign mid-lifecycle.
A poignant lesson in battery supply chain risks
China’s export controls are a wake-up call to many product builders and operators. This inflection point highlights the risks of disruption, delays, and cost escalation when we put all the eggs in one basket — locking in product design to a battery solution that can only use one cell type from a specific vendor.
SDBs built on TBOS turn this crisis into a competitive advantage by helping companies de-risk supply chains and pivot faster in response to regulatory shocks, enhancing resilience.
The battery supply chain is shifting. We must look beyond cost, density, and cycle life. China’s recent export controls aren’t the first nor last time we face supply chain disruptions. Companies must achieve flexibility and agility to mitigate geopolitical risks, and TBOS offers the foundation to future-proof your operations.
