The world’s largest maker of electric vehicle batteries is not housed in Palo Alto, California. Contemporary Amperex Technology Co. Ltd. (CATL) is a Chinese company that, with the help of generous government subsidies has become the world’s largest supplier of electric vehicle batteries. The company just went public, turning its founders into billionaires. CATL is valued at $12.3 billion, rather inexpensive compared to Tesla’s valuation of $55.77 billion today. Bloomberg’s Jie Ma tells the story of Zeng Yuqun, CATL’s founder.
The government’s generous subsidies for new-energy vehicles and restrictions on gasoline cars in some cities will help battery demand quadruple in the next four years in China, Bloomberg New Energy Finance said in a report Monday. CATL is best-positioned to benefit because of its advantages in capacity and customer base, BNEF said.
Zeng was born in a mountain village an hour away from CATL’s headquarters in Ningde city, Fujian province, and sometimes organizes employee excursions to his birthplace. For most of his career, he worked on lithium-ion batteries for consumer electronics, including the iPhone, at a subsidiary of Japan’s TDK Corp. that he helped set up.
Zeng’s decision to found CATL in 2011 marked a gamble on Chinese policy. Just 1,014 alternative-energy vehicles were sold in China that year, according to Bloomberg Intelligence, but Zeng’s prediction that the government’s push for alternative-energy cars would boost demand for lithium-ion batteries proved correct.
Still, challenges lie ahead. CATL lowered battery prices to gain market share after the government reduced EV subsidies, and that weighed on profitability, Zeng said last month during an online roadshow.
CATL will, during the next three years, “grasp the opportunities of the fast growth in the global lithium-ion battery market, and maintain our leading position in technologies, manufacturing, capacity and talents,’’ Zeng said.
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