China’s government has taken a bold step to strengthen its hold on the electric vehicle (E.V.) battery market by mandating government licenses for transferring essential battery manufacturing technologies beyond its borders. This move arrives as Chinese manufacturers, including CATL, the world’s biggest producer of electric vehicle batteries, have made significant advances in creating affordable batteries with impressive driving ranges.

The regulations imply that any attempt to share these eight key technologies through trade, investment, or cooperation needs government approval, which could slow down the expansion of Chinese auto manufacturers looking to establish factories abroad, especially in the eyes of the European Union, which has been urging them to invest within its borders.

The U.S. has shown skepticism toward Chinese investments, but plans are still on the table for at least two Chinese battery factories in Michigan. The recent restrictions come on the heels of licensing requirements for exporting seven types of rare earth metals essential for battery production, which have caused disturbances in Western and Japanese industries reliant on such materials for advanced tech and vehicles.

As China continues to fortify its position in the E.V. market, the global race toward electric mobility becomes even more competitive and challenging for foreign manufacturers.