Many of China’s largest companies are strategically aligned to China’s global ambitions. National giants in the areas of telecoms, information technology, and manufacturing have made global headlines for years. One major national priority is decreasing the reliance on foreign energy. This ambition has driven investment into new areas, particularly in electric vehicle technology. China is already the world’s largest electric vehicle market and is expected to continue to grow quickly over the next decade.
While domestic car makers have had to play catch-up to their global competitors in combustion engine vehicle design, Chinese companies have an opportunity to leapfrog and dominate the global market for electric cars. One of the major contributors to this competitiveness is CATL, the world’s largest automotive battery supplier.
Company Highlights
CATL is huge, by any metric. To feature a few:
- Largest by global market share with 36%.
- Largest by planned capacity for future battery manufacturing, with plants in development in Europe and North America, including Europe’s largest planned facility in Hungary (Fun fact – this will be the largest foreign investment in Hungary ever).
- Strong portfolio of clients, including General Motors, Tesla, and BMW.
- Largest market cap: If CATL were a car company, it would be the third most valuable company in the world by market cap, second only to Tesla and Toyota.
- Strong financials: 2021 revenues reached RMB130 billion, up 159% year on year. Net profit rose by 185% to RMB 15.9 billion.
A Quick History
CATL (full name Contemporary Amperex Technology Company Limited), was founded by Robin Zeng in 1999 in Ningde, Fujian. The company originally produced batteries for consumer electronics before being acquired by TDK. CATL was well positioned to benefit from increasing policy support for the development of battery technologies, but these policies required domestic ownership, so over a several year period, TDK divested CATL into a separate company.
CATL has thrived ever since, building on strong connections at home and abroad within the battery materials supply chain. Having strong vertical integration has proven to be a good strategy, as global demand for electric vehicles has driven prices for key materials (lithium, cobalt, and nickel) through the roof. If they are able to maintain control of their costs and market position, CATL can expect to retain it’s position as the world’s largest electric vehicle battery supplier.
Would you like to add CATL to your portfolio? CATL is a component of the China Information Technology Industry Fund, the CSI 300 Index Advanced Fund, and the China Modern Manufacturing Industry Fund.
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