CATL is next Chinese company to seek more fortune abroad

The world’s largest electric vehicle battery manufacturer is intensifying its global expansion efforts as it seeks to sustain its growth amid increasing competition in China’s EV market. CATL believes it can only maintain its dominant position by focusing on international markets.

As the Chinese domestic market heats up over EV price wars and factory overcapacity, battery manufacturer CATL is next in line to intensify its investments abroad. Only last week, Chinese EV maker Aiways announced that it was leaving its home country to focus exclusively on foreign sales. It no longer wanted to be sucked into a negative pricing spiral.

Two new plants

Amidst the planning of a broader international expansion, CATL will add two new overseas plants, bringing its total scheduled overseas facilities to eight. These new facilities include a joint venture with Stellantis in Spain and a potential battery cathode materials facility in Morocco to supply its European battery plants.

In an internal memo, CATL CEO Robin Zeng emphasized how the market situation in its homeland is reshaping the challenges: “Competition in the Chinese domestic market is getting tougher, and there is still plenty of room for CATL to grow overseas.

The international situation will change rapidly in 2024. Still, the trend of new energy is an international consensus, and the temporary uncertainty will bring opportunities to those capable of seizing these opportunities.” Coming from the CEO himself, the memo seems to hint that he will guide the international strategy in persona.

CATL is capable beyond doubt. In 2023, the company solidified its status as the top power battery maker, installing nearly 300 GWh of batteries, a 41% year-over-year increase. The battery maker captured a whopping 36.8% share of the global market and remains the only manufacturer of its kind with a market share exceeding 30%. However, new and smaller suppliers are keen to step in, and archrival BYD is rapidly gaining market share.

Betting on technology licensing

The expansion strategy overseas includes sites already announced in Germany, Hungary, Indonesia, Thailand, and the United States. CATL is collaborating behind the scenes with Ford and Tesla in the US, as it faces exclusion due to the stringent US subsidy policies under Joe Biden’s Inflation Reduction Act. As a result, the company participates indirectly in the US battery market by licensing its technology and providing production expertise.

CATL is actively exploring technology licensing as a core component of its export strategy. The company is discussing licensing its battery technology with several original equipment manufacturers (OEMs). Reports indicate that General Motors is among the companies considering a partnership with CATL for LFP battery technology (lithium-iron-phosphate), which could include a joint North American factory.

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