Chinese battery giant and Tesla supplier CATL is expanding globally: Here's why it matters
The world's largest electric vehicle (EV) is going all-in on international expansion and could shake up the EV market in the process with its battery-swapping tech rollout.
China's Contemporary Amperex Technology Co. Ltd. (CATL) is a key player in the global transition to more sustainable transport, with a market share in the EV sector of roughly 38%. CATL's clients include global players like Tesla, Volkswagen and BMW, with the firm boasting technology far superior to that of Western competitors.
Despite its outsized impact on the EV industry, the company had mostly flown under the radar until May this year, when it launched the world's largest initial public offering (IPO) of 2025 to date in Hong Kong.
The IPO raised 41 billion Hong Kong dollars ($5.2 billion), after CATL stocks surged and an over-allotment option was fully exercised.
Here is what CATL has in the works following its IPO.
Ahead of its public offering, CATL said 90% of the funds raised by going public would be put toward its expansion into Europe, particularly its under-construction factory in Hungary.
The company's 7.6-billion-euro ($8.2 billion) investment into the Debrecen battery plant was first announced in August 2022 and is expected to begin production this year.
The battery maker has already established a wholly owned manufacturing base in Germany, which first opened in 2023. It has also announced plans to build a battery plant in Spain through a joint venture with Stellantis.
CATL's global investments follow a trend of more Chinese EV companies, including auto giant BYD, shifting to Europe amid aggressive competition and price wars in the domestic market.
Speaking at the World Economic Forum in Tianjin, China, on Thursday, Ni Jun, CATL's chief manufacturing officer, said the brutal discount war would not end without intervention from Beijing.
He added that, if a big player continues to cut prices, it could lead to other competitors being driven out of the market and create a monopoly. While CATL's Jun did not name any companies, CATL's main competitor BYD announced price cuts in late May.
Tight margins and overcapacity in China have been a driving force in CATL's Europe push, said Tu Le, founder and managing director of Sino Auto Insights, adding that the company is already supplying "virtually every" EV maker in China, limiting domestic growth opportunities.
But not everything in Europe has been easy. The bloc placed punitive tariffs on made-in-China EVs last year, following an even more severe crackdown in the U.S.
Le said that the Hungary facility is another major step toward the company's localization plans and that it will lead to lower labor costs and a geopolitically friendlier environment when compared to Germany.
CATL is also involved in an integrated electric vehicle battery project in Indonesia. According to local media reports, government officials expect production to begin in March 2026, which could give CATL a presence in the growing EV market of Southeast Asia.
CATL said in a recent interview with The Financial Times that it also plans to roll out its battery-swapping and recycling technology to Europe, in a move that could have significant ramifications for the regional market. CNBC has contacted CATL for further details.
Modern battery-swapping technology, while popular in China, is yet to take off in Europe. Chinese EV maker and battery-swapping pioneer Nio is one exception. The company has introduced 60 battery swap stations across Germany, the Netherlands, Norway, Sweden and Denmark.
Jeep and Dodge maker Stellantis, meanwhile, recently partnered with U.S.-based Ample to integrate battery swapping technology to a fleet of 100 Fiat 500 EVs in Madrid, Spain.
The experience of using a battery swap station is thought to be very similar to using an automated car wash. The EV driver parks the car on a platform with an integrated system, which removes the depleted battery from beneath the vehicle and replaces it with a fresh, fully charged one. The whole process takes about five minutes.
Advocates of battery charging through a swapping station say the technology solves a number of issues, particularly relating to fast charging and long-term performance — two major sticking points for the widespread adoption of EVs.
Analysts say another key benefit to swapping is that it allows car manufacturers to maintain ownership of the battery, which lowers the initial price of the vehicle and creates a regular revenue stream for the OEMs.
Some drawbacks, however, include high initial infrastructure costs and a lack of standardization across car manufacturers.
Connor Watts, battery raw materials analyst at consultancy Fastmarkets, said CATL, which has a number of partnerships with Chinese OEMs, is well positioned to implement the necessary level of product standardization across its customer base.
"And particularly following its recent influx of cash from its Hong-Kong listing, it has the necessary capital to develop infrastructure within the European market," Watts told CNBC by email.
"Of companies that could succeed in developing the European battery swapping industry, none are better placed than CATL considering its market position," he added.
Julia Poliscanova, senior director for vehicles and e-mobility supply chains at the campaign group Transport & Environment, said major carmakers would have to agree to a standardized cell design for battery-swapping technology to work at scale in Europe.
"Battery swapping is a good addition to the charging space, and in some parts of the market it makes sense … but it is not a silver bullet to solve our problems," Poliscanova told CNBC by phone.
"We will still need batteries and we will still need materials for them, whether they are swapped or whether they are in the car permanently," she added.
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'Oh man, in my heart and sometimes out loud, I'm singing the Star-Spangled Banner. I'll sing it out loud to the top of my lungs when I watch that show," she said. 'It makes you proud to be in this country, and we're celebrating our freedom, and I'm going to start crying now. Don't get me started.' Organizers in Nashville ordered fireworks for that show over a year ago so they weren't affected by the tariffs. It was the same in one of New Mexico's largest cities, where Rio Rancho officials planned to spend a little more to go bigger and higher this year. In Oklahoma, Big Blast Fireworks supplies nonprofit groups so they can fundraise by setting up fireworks stands. The company received its first container from China in January before the tariffs hit. The second container arrived in February and was subject to a 10% tariff. The third container was put on hold to avoid the highest tariffs, meaning inventory could be tight later this year if nothing changes. 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As for this year, Warren said the price tag for the Elephant Butte show was unchanged and he and Johnson can't wait to see spectators lining the shoreline, on the surrounding hillsides and on boats bobbing on the lake. The mission every year is to make sure 'that the T's are all crossed," Warren said.
The Hill
5 hours ago
- The Hill
Fireworks will light up this Fourth of July. Next year could be different if tariff talks fizzle
ALBUQUERQUE, N.M. (AP) — Like clockwork, Carla Johnson sends out letters every spring asking for donations to help pay for the annual Fourth of July fireworks show that draws tens of thousands of people to New Mexico's largest lake. And she has no reservations about doling out verbal reminders when she sees her patrons around town. There's too much at stake to be shy about fundraising when donations collected by Friends of Elephant Butte Lake State Park are what make the tradition possible. But even Johnson's ardent efforts as the group's fundraiser might not cut it next year if the U.S. and China remain locked in a trade war. With nearly all of the aerial shells, paper rockets and sparkly fountains that fuel America's Fourth of July celebrations being imported from China, volunteer groups like Johnson's and cities big and small have been closely watching the negotiations. A 90-day pause on what had been massive tariffs brought some temporary relief, but industry experts acknowledge that the tiff has lit a fuse of uncertainty as the price tag for future fireworks displays could skyrocket if an agreement isn't reached. There were similar concerns in 2019 as trade talks between the U.S. and China dragged on. Industry groups had called on officials then to exempt fireworks from escalating tariffs. The American Pyrotechnics Association and the National Fireworks Association reignited the lobbying effort this spring, noting in letters to President Donald Trump that fireworks play a crucial role in American celebrations. The groups say the industry is made up mostly of family-owned companies that are often locked into long-term contracts that leave them unable to raise prices to offset cost surges brought on by higher tariffs. And there are few options for sourcing the more than 300 million pounds (136 million kilograms) of fireworks needed to feed demands. China produces 99% of consumer fireworks and 90% of professional display fireworks used in the U.S., according to the APA. 'I think overall it's the uncertainty,' said Julie Heckman, the APA's executive director. 'Yeah, we have a 90-day pause, but are the negotiations with China going to go well? Or is it going to go sky-high again? You know, triple digits. It's very hard for a small business to plan.' Fireworks have their roots in China. To ward off evil spirits, people would throw bamboo stalks into a fire, causing them to pop as the air inside the hollow pockets heated up. These early firecrackers evolved into more sophisticated fireworks after the Chinese developed gunpowder in the 9th century. By the 15th century, Europe was using fireworks for religious festivals and entertainment. In 1777, they were used in Philadelphia and Boston for what were the first organized Independence Day celebrations. Now, fireworks are synonymous with the summer holiday and with ringing in the new year. Shows have become elaborately choreographed displays that are often synced to live music. In Nashville, the Music City's award-winning symphony orchestra puts its own spin on the festivities. In New York City, organizers of the Macy's show will fire off 80,000 shells, with some reaching heights of 1,000 feet (304 meters). The National Park Service promises a spectacular show on the National Mall in Washington, D.C. At Elephant Butte in southern New Mexico, they're going old school and will light the fireworks by hand. Charlie Warren, vice president of the Friends of Elephant Butte Lake State Park, said it's like spectators are getting two shows at once as the colors reflect on the water below and the loud booms reverberate off the lake. Johnson, who also serves as the group's treasurer, gets emotional describing the experience. 'Oh man, in my heart and sometimes out loud, I'm singing the Star-Spangled Banner. I'll sing it out loud to the top of my lungs when I watch that show,' she said. 'It makes you proud to be in this country, and we're celebrating our freedom, and I'm going to start crying now. Don't get me started.' Organizers in Nashville ordered fireworks for that show over a year ago so they weren't affected by the tariffs. It was the same in one of New Mexico's largest cities, where Rio Rancho officials planned to spend a little more to go bigger and higher this year. In Oklahoma, Big Blast Fireworks supplies nonprofit groups so they can fundraise by setting up fireworks stands. The company received its first container from China in January before the tariffs hit. The second container arrived in February and was subject to a 10% tariff. The third container was put on hold to avoid the highest tariffs, meaning inventory could be tight later this year if nothing changes. 'As a small business, we are passionate about watching our price points and intentional about passing along as much savings on to customers as possible,' said Melissa Torkleson, a managing partner at Big Blast. With some orders on hold, industry experts say Chinese manufacturers throttled back production as warehouses filled up. The backup in the supply chain also has resulted in competition for shipping space aboard ocean vessels, and Heckman, the APA's director, said it will take much more than flipping a light switch to ease either situation. If the trade war drags on, she said, there are ways that show organizers can adjust and spectators might not notice. A minute or two could be shaved from a show or certain types of fireworks could be substituted with less expensive options. As for this year, Warren said the price tag for the Elephant Butte show was unchanged and he and Johnson can't wait to see spectators lining the shoreline, on the surrounding hillsides and on boats bobbing on the lake. The mission every year is to make sure 'that the T's are all crossed,' Warren said. 'Because this community would not be happy if this show didn't come off,' he said.
