A news notification popped up on my phone on the morning of 13 December. This story in news.com.au reported that “BYD Shark 6 ute named News Corp Australia’s 2024 Car of the Year.”
The story quoted motoring writer Iain Curry as saying: “The BYD Shark brings things on to the next level. The value you get, the performance, the space, the technology – it really is a game changer in that space.” It added: “This is the first ute to win our Car of the Year award, and the first Chinese brand to do so.”
Today, while we’re accustomed to finding a “Made in China” glass at an Australian supermarket and a bottle of Australian red wine at a Chinese supermarket, this Car of the Year BYD ute and minerals for EV batteries show a new landscape of trade.
China-Australia trade 2.0 could be smarter and greener. It not only sounds trendy, but also signifies a major upgrade – more opportunities, greater volume, increased job prospects, and enhanced resilience of the free trade partnership.
As the world faces economic uncertainty and rising protectionism, this pragmatic choice could make a difference and reflect a thoughtful and forward-thinking mindset.
Forging EV and battery partnership
The “Car of the Year” award is not only a recognition of a vehicle’s exceptional performance and design, but also a celebration of the exhilarating experience it offers behind the wheel. The good news is that the growing desire among Australian consumers for the driving pleasure of the BYD Shark 6 ute will soon be fulfilled.
The first ship loaded with BYD Shark 6 dual-cab utes has left China and is on its way to Australian showrooms, drive.com.au reported on 18 December, set to fulfill thousands of local orders since sales kicked off in October 2024.
BYD surpassed Tesla as the top seller of EVs in the fourth quarter of 2023, selling about 530,000 units worldwide compared to Tesla’s 485,000. More than 80% of EVs sold in Australia, including Teslas, are manufactured in China.
Tesla is still the market leader in Australia, accounting for a little more than half of EV sales last year, but BYD is closing in, likely due to its more competitive pricing.
The upcoming launch of the BYD Shark 6 could be a New Year’s gift for some drivers. But, looking at the bigger picture, it reflects the growing potential for strong trade relations between China and Australia.
The International Energy Agency, in its Global EV Outlook 2024, highlighted that soaring EV sales are driving a sharp increase in global battery demand, with the fastest growth observed in the United States and Europe in 2023. Demand for EV batteries surpassed 750 GWh in 2023, a 40% increase compared to 2022.
This rising demand is significantly impacting the need for critical minerals like lithium. Battery demand for lithium stood at around 140 kt in 2023, 85% of total lithium demand, and up more than 30% compared to 2022.
For cobalt, demand for batteries was up 15% at 150 kt, 70% of the total. Batteries accounted for more than 10% of total nickel demand. Battery demand for nickel reached nearly 370 kt in 2023, up nearly 30% from 2022.
Australia, a leading producer of battery minerals, possesses all the critical minerals required for EV batteries and supplied approximately 45% of the world’s lithium in 2023.
Battery production in China is more integrated than in the United States or Europe, given China’s leading role in the upstream stages of the supply chain. We are seeing complementary advantages of China and Australia and a surge in mineral exports.
According to Australia’s National Battery Strategy, the country aims to become a globally competitive producer of batteries and battery materials. China, the world’s largest EV battery exporter with about 12% percent of its EV batteries being exported, could share its experiences and explore collaboration with Australia.
The free trade agreement between China and Australia plays a key role in this win-win scenario.
As Scott Dwyer from the University of Technology Sydney’s Institute for Sustainable Futures put it, the increase in Chinese-manufactured EVs was benefitting Australia.
“So, the increase in new products coming from the Chinese market to Australia gives consumers more choice and brings the technology into the country that people can then use to decarbonise their own transport emissions.”
Former BHP chief economist Huw McKay has said that “consumers are the ultimate beneficiaries” of China’s export of high-quality and affordable electric vehicles.
Promoting upgraded green trade
The new stories of the two trade partners continue. On 27 November, Australian mining giant Fortescue announced that it awarded a US$400 million contract to Chinese heavy machinery manufacturer XCMG to supply zero-emissions mining equipment.
The contract marked XCMG’s largest contract outside of China for mining equipment and would see battery electric wheel loaders, wheel dozers, water carts, float prime movers, and graders delivered to Fortescue’s Pilbara mining operations by 2030.
The use of this equipment will eliminate millions of litres of fossil fuels from Fortescue’s iron ore operations over the lifecycle of the assets, with the first pieces of equipment expected to be deployed in 2026.
“As the global mining industry continues to evolve, we’re proud to be at the forefront of driving innovation in value-adding green technology and showing the world that industry can decarbonize,” said Fortescue Metals chief executive Dino Otranto.
Over the past few years, both China and Australia have joined a growing club of countries with net-zero emissions targets.
China has announced that it will peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060 and Australia has pledged to get to net-zero emissions by 2050.
In this scenario, there is growing pressure to reduce carbon footprints and shift toward sustainable energy sources.
Green mining, the practice of extracting minerals in environmentally sustainable ways, offers an exciting opportunity to enhance and diversify trade between the two partners.
It could enhance the current bilateral trade, appealing to both Chinese and international companies seeking sustainably sourced materials.
Green mining involves integrating advanced technologies such as AI, renewable energy, and circular economy models. This technological shift could drive greater trade and collaboration between China and Australia.
The trade would demonstrate how green mining technologies can promote sustainability while still meeting the world’s growing demand for minerals.
As bilateral trade in traditional sectors needs to seek new pathways to enhance and diversify economic engagement, the trade of EVs, battery minerals, and green mining opens up new potential and opportunities. And this new landscape is expanding.
It builds up more trade resilience between the two countries and becomes part of the global narratives on energy transition and the pursuit of a sustainable future.
Zijian Qi
Zijian Qi, managing editor, Xinhua News Agency, Sydney Bureau