Sep 4, 2024

Listen to the full version CATL, the world’s largest electric-vehicle (EV) battery maker, is seeking new drivers of growth to help maintain a lead over its rivals and head off a challenge from automakers cutting into its lane. Potential obstacles include a lack of product differentiation, price wars, and the threat of emerging technologies like solid-state batteries, which if eventually commercialized are expected to charge faster and last longer than those with conventional liquid electrolytes. Then there are the trade roadblocks, like stepped up European and U.S. import tariffs and even possible sanctions over forced labor and military concerns. You've accessed an article available only to subscribers Get our weekly free Must-Read newsletter. RELATED Share this article DIGEST HUB Explore the story in 30 seconds CATL seeks new growth avenues to stay ahead of rivals despite challenges like lack of product differentiation, price wars, and competition from new technologies and automakers. CATL increased its global battery market share to 37.8% and domestic market share to 46.4% in the first half of the year. CATL is diversifying through initiatives like superfast-charging batteries, battery swapping, skateboard chassis, and ventures into electric ships and planes, amidst increasing competition and technological advancements. AI generated, for reference only Explore the story in 3 minutes CATL, the world’s largest electric-vehicle (EV) battery maker, is looking for new growth drivers to stay ahead of competitors and address challenges posed by automakers making their own batteries, lack of product differentiation, price wars, and emerging technologies like solid-state batteries [para. 1],[para. 2]. Despite potential obstacles, CATL increased its global battery market share by 2.1 percentage points to 37.8% in the first half of the year, as per SNE Research. Domestically, its market share grew nearly 3 percentage points to 46.4%, according to the China Automotive Battery Innovation Alliance (CABIA) [para. 3]. However, the growing competition from second- and third-tier manufacturers is starting to impact CATL’s capacity utilization rate [para. 4]. CATL is diversifying by launching new products like its superfast-charging Shenxing battery and expanding into new areas such as battery swapping, electric ships, and planes. The firm aims to raise its profile among consumers through "CATL Inside" stickers, outdoor advertising, UEFA European Championship sponsorship, and an experience store in Chengdu [para. 6][para. 7][para. 8]. The strategy is similar to Intel Corp.'s “Intel Inside” campaign, aimed at making CATL a household name [para. 9]. Last year, a major price war began in the EV sector. CATL was initially able to use its market position to resist price cuts, but as competition increased, its capacity utilization rate fell to 70.5% in 2023 and further to 65.3% in the first half of this year [para. 11]. Vehicle manufacturers like Zhejiang Geely Holding and BYD are also developing advanced batteries, increasing competition [para. 13][para. 14]. The rise of plug-in hybrids, which surged 85.2% in sales in the first half of 2024 compared to an 11.6% increase in pure EVs, further pressures CATL. Plug-in hybrids require only 44% of the battery capacity needed by pure EVs, which affects demand [para. 17][para. 18]. New technologies like Tesla's and LG Energy Solution's dry electrode manufacturing process may disrupt the market by reducing costs and increasing energy density [para. 20]. There are also significant governmental and investor interests in solid-state batteries, with China offering substantial subsidies to develop the technology. CATL plans to start small-scale production of solid-state batteries in 2027 [para. 21][para. 22]. In the quest for growth, CATL has prioritized battery swapping, launching Evogo in early 2022 in collaboration with companies like BAIC Motor, Didi Global, and GAC Aion New Energy Automobile [para. 29]. The firm is also focusing on the development of skateboard chassis, a technology that integrates batteries into vehicle chassis, streamlining the manufacturing process [para. 34],[para. 35]. The first vehicle featuring CATL's skateboard chassis technology is expected to be released by the end of the year [para. 37]. Expanding its scope, CATL is also innovating in electric boats and aircraft through subsidiaries established in 2022 and 2023, respectively [para. 43]. Additionally, escalating U.S. tariffs have prompted CATL to adopt a technology licensing model for its global expansion, with less intense regulatory pressures in Europe. CATL's market share in Europe reached 35%, but competition from South Korean firms like LG Energy Solution poses a challenge [para. 46]. In summary, while CATL maintains a strong market position, it faces increasing competition, evolving technologies, and regulatory challenges. The company's diversification and strategic initiatives in new markets and technologies aim to consolidate its lead in the global EV battery market [para. 49]. AI generated, for reference only Who’s Who Contemporary Amperex Technology Co. Ltd. (CATL) Contemporary Amperex Technology Co. Ltd. (CATL) is the world's largest EV battery maker, with a 37.8% global market share as of mid-2023. The company is diversifying to maintain its lead, launching products like the Shenxing battery and expanding into battery swapping, skateboard chassis, electric ships, and planes. CATL faces competition from emerging technologies like solid-state batteries and other manufacturers, prompting strategies like licensing and opening experience stores to strengthen consumer influence. CATL Intelligent Technology Co. Ltd. CATL Intelligent Technology Co. Ltd., established in 2021, focuses on integrating batteries into vehicle chassis. The company aims to support automakers with skateboard chassis systems, allowing for quicker vehicle launch cycles and cost reductions in R&D and hardware. While it offers potential savings for automakers, adoption has been limited mainly to companies in which CATL has invested, like Hozon's Neta, Avatr, and BAIC's Blue Valley. BYD Co. Ltd. BYD Co. Ltd. is a major competitor in the battery industry, known for its cost-effective lithium iron-phosphate (LFP) Blade battery introduced in 2021. BYD’s strategy has captured a significant share of the low to mid-end market, particularly with its long-range plug-in hybrids. These hybrids have seen an 85.2% sales surge in the first half of 2024, compared to an 11.6% increase in pure EVs. Contemporary Amperex Electric Vessel Technology Co. Ltd. Contemporary Amperex Electric Vessel Technology Co. Ltd. was established by CATL in November 2022 to focus on innovations in electric boats. This move is part of CATL’s strategy to diversify beyond traditional markets and explore new growth areas like electric vessels and aircraft. SVOLT Energy Technology Co. Ltd. SVOLT Energy Technology Co. Ltd. is a rival battery-maker to CATL. According to its Chairman and CEO Yang Hongxin, SVOLT has observed that CATL has started to reduce prices due to increased competition. SVOLT is part of the growing competition in the battery market as second and third-tier manufacturers ramp up production, impacting CATL's capacity utilization rates. Zhejiang Geely Holding Group Co. Ltd. Zhejiang Geely Holding Group Co. Ltd. is a legacy automaker mentioned in the article for developing its own batteries, notably the Aegis battery with advanced features like improved safety and faster charging. Geely is also part of a battery swapping alliance led by Nio, collaborating with multiple automakers like FAW Group, Changan, Chery, Lotus Technology, and Guangzhou Automobile Group to advance battery swapping solutions in the EV sector. Baosheng (Suzhou) Energy Technology Co. Ltd. Baosheng (Suzhou) Energy Technology Co. Ltd. develops dry electrode manufacturing technology, which is seen as a potential game-changer in the battery industry. The company claims this technology can significantly cut production costs and increase energy density, potentially transforming traditional, more costly and energy-intensive production methods. Tesla Inc. Tesla Inc. is advancing the dry electrode manufacturing process, which could disrupt the market by potentially reducing costs and significantly increasing energy density. This technology aims to overhaul traditional, more expensive, and energy-intensive production methods, posing a competitive challenge to existing battery manufacturers like CATL. LG Energy Solution Ltd. LG Energy Solution Ltd. is a South Korean firm that competes fiercely with CATL in the battery market. On July 2, they announced plans to supply LFP batteries to Renault’s subsidiary, Ampere, with production based in Poland. Previously, CATL dominated this supply to European automakers. Anhui Jianghuai Automobile Group Corp. Ltd. Anhui Jianghuai Automobile Group Corp. Ltd. (JAC) is a member of a battery swapping alliance led by Nio. This includes other major automakers like FAW Group, Changan Automobile, Geely, Chery Automobile, Lotus Technology, and Guangzhou Automobile Group. The alliance focuses on promoting battery swapping technology as an alternative to traditional EV charging methods. Lotus Technology Inc. Lotus Technology Inc. is part of an alliance in the emerging battery swapping market. The alliance includes members like Nio Inc., FAW Group Co. Ltd., Chongqing Changan Automobile Co. Ltd., Geely, Chery Automobile Co. Ltd., Anhui Jianghuai Automobile Group Corp. Ltd., and Guangzhou Automobile Group Co. Ltd. Guangzhou Automobile Group Co. Ltd. Guangzhou Automobile Group Co. Ltd. is a member of Nio's battery swapping alliance. The company is exploring battery swapping as an alternative to high-power ultra-fast charging for electric vehicles, in light of limitations with existing electrical grid infrastructures in urban and less developed areas. GCL Technology Co. Ltd. GCL Technology Co. Ltd. reported on July 10 that Baidu's robotaxis will adopt battery swapping services provided by its subsidiary. This signifies GCL's entrance into the battery swapping market, an alternative to conventional EV charging, which is facing developmental challenges, especially in areas with insufficient electrical grid infrastructures. FAW Group Co. Ltd. FAW Group Co. Ltd. is mentioned as a member of Nio's battery swapping alliance. This alliance includes other major automakers such as Chongqing Changan Automobile Co. Ltd., Geely, Chery Automobile Co. Ltd., Anhui Jianghuai Automobile Group Corp. Ltd., Lotus Technology Inc., and Guangzhou Automobile Group Co. Ltd. Chongqing Changan Automobile Co. Ltd. Chongqing Changan Automobile Co. Ltd. is a member of Nio's battery swapping alliance. They are part of a group that includes FAW Group, Geely, Chery Automobile, Anhui Jianghuai Automobile, Lotus Technology, and Guangzhou Automobile Group. This alliance is pushing forward the adoption of battery swapping technology in the EV market. Chery Automobile Co. Ltd. Chery Automobile Co. Ltd. is a member of Nio's battery swapping alliance, collaborating on expanding battery swapping infrastructure to support electric vehicles. This places Chery among key automakers like FAW Group, Geely, and others, contributing to the growth of this emerging market. Roewe (SAIC) The article does not mention Roewe (SAIC). It primarily discusses CATL's strategies, challenges, and competition in the EV battery market, including partnerships, innovations, and expansions into new sectors. AI generated, for reference only What Happened When