China’s CATL is the largest supplier of batteries for EVs
China’s Contemporary Amperex Technology Co. Ltd (CATL) has become the biggest maker of batteries for electric vehicles.
Founded in 2011 in China’s Fujian province, CATL reported that it sold just shy of 12 GWh of batteries in 2017 – a near doubling of the 6.8 GWh sold in 2016, and a remarkable performance over a short time for such a young player in the market.
This compares to 10 GWh for Japan’s Panasonic, its closest rival. However, Tesla and Panasonic still intend to reach production levels of 35GWh/year by the end of 2018 from their Nevada Gigafactory, suggesting the race for supremacy in 2018 is still on.
In the list of top EV battery producers, the majority are Chinese. CATL’s success is indicative of China’s dominance in the global EV market.
China’s securities regulator approved a US$2 billion initial public offering for the company in April. The government has been fast tracking valuable companies to float on the country’s stock markets.
The IPO could come as soon as the middle of this year. CATL aims to use the funds to create a massive battery plant, second only to Tesla’s massive Gigafactory.
However, China’s EV market is set for a shakeup in the next few years, as wholly-owned foreign subsidiaries can be established in the country, potentially muscling out domestic competitors. Earlier this year Panasonic said it was considering partnering again up with long-term collaborator Tesla to build another Gigafactory in China.
Furthermore, China will withdraw subsidies in the next few years, creating a more challenging market for its companies.
However, given government support (official and unofficial) for its domestic players, it is perhaps more likely that its dominant position on the world market will see CATL’s position secure for the foreseeable future.