China CATL is a battery manufacturer that keeps ahead of competitors through innovation

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The world’s largest manufacturer of electric car batteries launched a new technology last month: a battery that uses sodium instead of lithium, a cheap and abundant material that can be extracted from salt.

“Innovation is the gene of CATL,” said Zeng Bin, co-founder and CEO of the Chinese company. “It is also the driving force for our rapid development.”

Hyundai Ampere Technology is headquartered in Ningde City, the capital city famous for tea plantations. In less than 10 years, it has grown into the battery group with the largest market share in the world, supplying automakers such as Tesla and BMW as well as domestic start-up NIO. product.

The company’s stock price has risen 160% in the past year, raising its market value to nearly $186 billion—more than the market value of all automakers such as Tesla and Toyota, as well as the market value of its main competitors, Panasonic and LG Chem. sum.

Born in a poor village during the chaotic period of the Cultural Revolution in 1968, he is now worth almost as high as Jack Ma, the founder of the Chinese Internet giant Alibaba. His company has 9 people on the Forbes Global Billionaires list, which is the same as the record of listed companies in the world.

With the soaring domestic demand for electric vehicles, CATL has gotten rid of Beijing’s broader suppression of China’s technology industry-the country delivered 271,000 new energy vehicles in July, a year-on-year increase 164% Compared with the same period last year, the China Association of Automobile Manufacturers said on Wednesday.

However, with the help of preferential policies provided by Beijing for companies in its huge domestic market, China’s rise will be difficult to maintain. Local challengers are stepping up their efforts to challenge its dominance. At the same time, its position in the United States and Europe is even more unstable, where it faces greater competition from international competitors.

Wu Hui, research director of the China Yiwei Economic Research Institute, a think tank that focuses on electric vehicles, said that the decline in market share in the Ningde era is “inevitable.”

“The rapid development of the Ningde era is inseparable from the huge space in the Chinese market and the government’s support for domestic enterprises,” he said. “With the relaxation of policies, competition is now being introduced to the whole [of China’s] Mobile battery market. “

© Imaginechina Limited/Alamy

Gaotian Hi-Tech, which received a 1.1 billion euro investment from Volkswagen last year, is building a cathode material plant in Hefei as part of a plan to expand the production of lithium-ion batteries.

In terms of market share, BYD, China’s second-largest electric vehicle battery manufacturer, reached a supply agreement with Ford’s Chinese joint venture last year. This is the company’s first joint venture with a global automaker.

CATL dominates the global production of lithium iron phosphate batteries, which use iron and phosphate instead of expensive metals such as nickel and cobalt. These batteries are used in Tesla’s short- and medium-range electric vehicles manufactured in Shanghai, some of which are exported to Europe.

The GWh battery capacity bar graph of newly sold passenger electric vehicles (Q1 2021) shows future CATL charges

According to analysts, the company has managed to reduce the cost of these batteries to a level well below US$100 per kilowatt-hour, which makes the cost of electric vehicles competitive with gasoline vehicles. Innovations such as material expenditure.

Analysts at China Investment Bank CICC predict that by 2025, CATL’s battery production will increase from 200 GWh this year to more than 600 GWh, accounting for 30% of the global market.

Jon Regnart, an analyst at the British Advanced Advancement Center, said: “The automotive industry never likes to be constrained by one supplier, but battery manufacturing is about scale, while CATL has scale and low cost.” You are stupid to say that any company will maintain its dominant position-look at Blockbuster and Nokia-but in the next 5 to 10 years, they have a good grasp of the battery market.”

© Martin Schutt / dpa-Zentralbild via Alamy

However, according to battery executive Mark Newman, CATL is facing fiercer competition from the established companies LG Chem and Samsung SDI in the global market. According to data from SNE Research, in May, in terms of batteries installed in passenger cars, LG Chem briefly surpassed the Ningde era to become the world’s largest battery manufacturer.

“Outside China, the situation is completely different-CATL is a challenger,” Newman said. “It will be more difficult for them because they have no scale advantage in Europe. Many of their manufacturing scale advantages are very localized. The jury doesn’t know how successful they can be.”

CATL said that its first European battery plant in Arnstadt, Germany, will be put into operation at the end of next year, and the plant will supply Volkswagen and BMW automakers in the region.

The line chart of US$000 per ton shows that the rise in lithium prices has accelerated the efforts of the Ningde era to develop alternative technologies

Wu said that diplomatic frictions with the European Union and the United States, as well as efforts to maintain cost advantages compared with Japan and South Korea’s competitors, are new challenges for the company to enter Europe.

Innovation may be a key differentiating factor.Last year CATL established a laboratory Called 21C, it is committed to battery innovation, including solid-state batteries and sodium-ion batteries. It said it has more than 5,000 employees engaged in research and development.

The company said that its young scientists pioneered work on sodium-ion batteries, which helped reduce costs. The price of lithium with limited supply has almost doubled in the past year.

Although sodium has a lower energy density than lithium, its source is easier and cheaper. The company said it will first combine sodium-ion batteries with lithium-ion batteries.

Billy Wu, an electrochemical manufacturing expert at Imperial College London, believes that sodium-ion batteries may be the first to be used for stationary energy storage. He said that although the use of vehicles “does not exceed the capacity of sodium ions,” it “is still far behind.”

He believes that Chinese industry will maintain its advantage.

“A few years ago, many Chinese battery manufacturers lag far behind many Korean and Japanese manufacturers in terms of innovation,” he said. “But they have a large group of PhDs, and if you invest enough money, they will eventually catch up.”

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