Leading Battery Maker CATL Responds to Market Concerns

Chinese battery giant Contemporary Amperex Technology Co., Ltd. (CATL) held an investor communication meeting on Monday to respond to a range of concerns, such as its development of overseas markets and lithium supply.

More than 50 investors from Hillhouse Capital, Cathay Fortune Corp., Tencent Investment, Temasek, Sequoia Capital, Fidelity Fund, Warburg Pincus, COSCO Shipping, KKR, GIC and Capital Group attended the meeting.

Regarding the upstream lithium resources, CATL stated that the company guaranteed the supply of lithium resources through investment cooperation, recycling and self-mining. Among them, the lithium recovery rate has exceeded 90%, and lithium recovery has played a certain role in supply security. In addition to overseas investment cooperation, the company has mined lithium resources in Yichun and other sites across China.

On January 18 this year, CATL’s subsidiary Contemporary Amperex Energy Service Technology Ltd. (CAES) rolled out EVOGO, its innovative modular battery swap solution, which includes battery blocks, fast battery swap stations and an app.

Regarding power exchange, Zeng Yuqun, CATL’s chairman, said that the ultimate solution for electric vehicles with a price range between 80,000 yuan and 120,000 yuan ($12,618 – $18,927) is swapping electric blocks. Zeng added that specific markets without sufficient power swapping devices are exactly what CATL wants to explore. In the future, CATL aims to be transformed from a manufacturer into a high-end service provider.

China Business Network reported on Tuesday that, regarding CATL’s possible decision to set up factories in the US, a capital market insider revealed that the company was instead considering setting up factories in Mexico and Canada, due to the labor force training difficulty, labor unions, costs, safety and other issues. However, Zeng Yuqun emphasized at the communication meeting that “CATL will definitely enter the US market.”

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The contribution of overseas business to the company should not be underestimated. According to the announcement issued by CATL, in 2018, 2019, 2020 and the first nine months in 2021, the proportion of overseas income to its total operating income was 3.53%, 4.37%, 15.71% and 21.21%, respectively.