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In a recent wide-ranging interview with CnEVPost, a CATL spokesperson talked about the company’s overseas partnership model and its layout for new technologies.
(Image credit: CnEVPost)
Chinese power battery giant Contemporary Amperex Technology Co Ltd (CATL, SHE: 300750) has talked with about a dozen carmakers about technology licensing partnerships as it tries to solidify its dominance in the global power battery market.
CATL has talked with about a dozen OEMs (original equipment manufacturers) for an LRS (License Royalty Service) model of cooperation, a company spokesperson recently told CnEVPost.
Under the LRS partnership model, CATL provides technology licensing as well as plant construction and operation services to help global OEMs and even the company’s peers quickly master battery production capabilities, the spokesperson said.
The model can be a win-win for all parties, with car companies gaining access to technology and learning to make batteries, while CATL gains access to new revenue models and more advanced forms of expanding its presence overseas, the company said.
CATL’s technology can even be licensed to competitors, which helps benefit consumers globally, the spokesperson said.
“CATL is committed to supporting the global transition to new energy sources with advanced technologies and products, and is actively exploring multiple collaboration models with global partners,” the spokesperson told CnEVPost.
CATL is a supplier to electric vehicle (EV) makers including Tesla (NASDAQ: TSLA) and Nio (NYSE: NIO), and is the world’s largest producer of power batteries.
The company had an installed battery volume of 259.7 GWh in 2023, and continues to be the world’s No. 1 with a 36.8 percent share, and is the only battery supplier in the world with a market share of more than 30 percent, according to SNE Research, a South Korean market researcher.
In overseas markets, particularly the US, CATL is navigating a complex regulatory environment by partnering with automotive giants to build plants.
Ford (NYSE: F) announced on February 13, 2023 that it would invest $3.5 billion in a lithium iron phosphate (LFP) battery plant in Marshall, Michigan, which is expected to go into production in 2026.
On March 28, Chinese media outlet LatePost reported that CATL was in talks with General Motors (NYSE: GM) about an LRS model partnership, with plans to jointly build an LFP battery plant in North America.
The Ford plant in Marshall is now in the substantial advancement stage, the CATL spokesperson told CnEVPost.
In the wide-ranging interview with CnEVPost, the CATL spokesperson talks about their views on capacity in the battery industry.
“As the world steps up its efforts to combat climate change, there is still huge market growth potential. e.g. about 16.7 million passenger EVs are expected to be sold globally in 2024, BNEF projects. High-quality and effective production capacity is still limited,” the spokesperson said.
“What is more, a large number of announced plants have not been implemented, and it is unclear if announced capacity will actually be achieved, ” the spokesperson added.
CATL’s ongoing construction of battery plants will better prepare the company to meet the growing needs of its customers and the market, it said, adding that in the future, the company will continue to build cost-effective products with cutting-edge technology that will benefit the world.
CATL’s comments echo an article in People’s Daily, a state-owned Chinese newspaper, days earlier, which argued that China’s capacity for new energy products, including EVs, lithium batteries and photovoltaic products, is not excessive, but insufficient.
The high-quality production capacity provided by China’s new energy industry has enriched global supply, eased global inflationary pressures, and promoted a global green and low-carbon transition, the People’s Daily said in the April 30 article.
Globally, such high-quality production capacity is not a surplus but a serious shortage, and the world needs more such high-quality production capacity, it said.
All parties should look at the issue of production capacity objectively and dialectically from the perspective of the market and global vision, and from the perspective of economic laws, so that all countries in the world can benefit from green production capacity, the article said.
CATL believes it’s well-positioned for more competition with solid-state batteries, sodium batteries and more emerging battery technologies in its portfolio.
The company is taking solid-state batteries very seriously and continues to conduct cutting-edge research and invest intensely in R&D, the CATL spokesperson told CnEVPost.
In the field of solid-state batteries, CATL is an industry leader with a large technology inventory, the spokesperson said.
Speaking at the China International Battery Fair (CIBF) 2024 event on April 28, CATL chief scientist Wu Kai said the company aims to produce all-solid-state batteries in small batches by 2027. That’s the first time the battery maker has mentioned a mass production timeline for solid-state batteries.
For a cutting-edge technology, the first thing that needs to be looked at is whether the technology is viable or not, and then the safety, reliability, consistency, and quality during the manufacturing process, the CATL spokesperson said.
The spokesperson told CnEVPost that there are three technology routes for solid-state batteries — the oxide route, the sulfide route and the polymer route.
There are still a lot of fundamental scientific issues to be solved, for example, the ion diffusion rate in most solid-state electrolytes is vastly different from that of liquid electrolytes, and after breaking through these challenges, there will again be issues with industrialization, the spokesperson said.
“CATL places great emphasis on solid-state batteries, has been working on them for years and has recently invested a lot more, and remains a leader in this are,” the spokesperson said.
CATL has also unveiled condensed batteries with energy densities of up to 500 Wh/kg to achieve a combination of high energy density and high safety, according to the spokesperson.
The company unveiled condensed batteries at the 2023 Shanghai auto last April for use in electric airplanes and EVs.
Outside of high-energy-density batteries, CATL was one of the first companies in China to announce sodium-ion batteries.
On July 29, 2021, CATL unveiled its first-generation sodium-ion batteries with an energy density of 160 Wh/kg, the highest in the world at the time.
The sodium-ion batteries could be charged for up to 80 percent in 15 minutes at room temperature, and had a discharge retention rate of more than 90 percent at temperatures as low as -20°C, the company said at the time.
Sodium-ion batteries were seen as having high potential at the time, especially given the skyrocketing prices of raw materials for lithium batteries at the time.
The price of lithium carbonate in China rose to about RMB 600,000 ($82,860) per ton at one point in November 2022, about 14 times the June 2020 price of an average of RMB 41,000 per ton.
However, the price of lithium carbonate has continued to decline since the end of 2022 and has largely stabilized at RMB 100,000 per ton so far this year.
As the price of lithium carbonate falls, the cost advantage of sodium-ion batteries is decreasing. CATL believes that its new generation of sodium-ion batteries, along with additional technological innovations, will allow the low-cost batteries to still do their job.
CATL is building a second-generation of sodium batteries that won’t completely replace lithium batteries, but will shine in many areas, the spokesperson told CnEVPost.
“CATL has developed the AB battery pack solution. By combining sodium-ion batteries with lithium-ion batteries in the same pack, the inadequate energy density of sodium-ion batteries at this stage can be made up, and the advantages of sodium-ion batteries in good performance under large powers and low temperatures can be brought into play, and hence more application scenarios can be developed,” the spokesperson said.
“Meanwhile, we are developing our second-generation sodium-ion batteries with energy density of 200 Wh/kg, and will provide updates as the situation progresses,” the spokesperson added.
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