Chinese giant CATL expands beyond batteries to power grids and EV platforms
Robin Zeng is the billionaire founder and CEO of CATL. He wants to transform the world's biggest battery manufacturer into a provider of green energy, as well as reduce the costs of developing electric cars, thus upending the economics that have driven the growth of the industry.
Zeng said in an interview he expected the business of developing "zero-carbon" electric grids to be "ten times larger" than supplying batteries for electric vehicles, a sector CATL currently leads with 37% share. CATL's goal, according to Zeng, is to create independent energy systems large enough to power massive data centers or cities.
CATL will also offer a standard electric car platform that includes a battery with long range integrated into the chassis. Then, customers could launch their own customized EVs after designing just the interior and exterior. Zeng stated that the goal is to drastically reduce EV development costs – from billions of dollars to millions – and open up the industry to new players.
Zeng's initiative aims to unlock growth for his 25 year-old company. It got its big break by selling lithium-ion battery packs for Apple's iPod, before pivoting in 2011 to EVs with a BMW deal.
CATL sold EV batteries worth $40 billion last year. This is up from $33billion a year before. Zeng's target of tenfolding revenue growth for electric grids would place the battery manufacturer on par with Sinopec and PetroChina, China's two largest oil companies.
CATL's pivots in electric grids, EV platforms and other strategic areas have never been reported before. Zeng gave an exclusive interview on November 7 outside CATL headquarters in Ningde in southern China. He also spoke about the battery giant’s willingness to invest in America if Donald Trump is elected president, the way to profitability for its European factories and the misplaced focus on solid-state batteries.
A GIANT GREEN GRID MARKET
CATL's business in energy storage grew by 33% last fiscal year, surpassing the growth of its EV batteries. Zeng believes that CATL has a greater opportunity to grow by providing green-grids, including solar and wind energy, dedicated storage systems and a system smart enough to use parked EVs as a source of power.
China has one of the highest EV adoption rates in the world. EVs and Hybrids account for more than 50% of all new vehicles sold there over the past few months.
Zeng claimed that CATL can build an emissions-free grid large enough to power massive mines or cities. Zeng stated that the firm's goal is to move beyond energy storage and into power production.
He said, "That's a huge difference compared to EVs."
CATL's management systems and grids could be of great help to AI companies that are scrambling for green energy in data centers. Zeng stated that CATL would be partnering with solar panel and wind turbine providers.
"Many data-center firms ask me: 'Hey Robin, are you sure that you can make it 100 percent green?' He said that they were often "giants" companies. "They are rich, but lack the technology."
CATL is planning a pilot project with CMOC Group in the Democratic Republic of the Congo. It owns a stake in the Chinese mining firm. The company also works with Hainan Island, a province in southern China, on a longer-term, larger project which would combine energy storage and solar and offshore turbines.
Off-the-Shelf EV Platform
CATL provides batteries for over a third (35%) of all electric and hybrid vehicles in the world.
Zeng has a new offering for the automotive industry - an electric vehicle chassis designed by CATL that can run more than 800 kilometers (497 miles), on a single battery charge. Zeng says the battery is integrated in the chassis to protect it in an accident.
The project code-named “panshi”, or “bedrock” in Chinese, was not officially announced, but CATL began marketing the platform to its customers. Reporters saw a demo version of the EV Platform at CATL's HQ on display for staff and customers.
Zeng stated that the project would reduce the cost of creating a new EV by billions of dollars down to only $10 million. Zeng stated that a niche EV company could become profitable with just 10,000 vehicles sold per year.
He said that this would allow new EVs to enter the market in countries without established automakers.
Zeng stated that CATL had shown its "panshi" (electric vehicle) technology to Porsche in order to create a luxury EV, and also to investors from the United Arab Emirates who were interested in launching a local brand of EVs.
"We do not want to make a car." Never," Zeng said. "But we do our best to prepare everything for automakers."
Zeng stated that CATL would be able to provide a 3D printed body for the vehicle.
CATL is facing competition from Xpeng, Shanghai-based engineering company Launch Design and other companies in the new market of ready-to-make EV platform.
Overseas Battery Production
CATL is working in Europe on a joint-owned battery factory with Stellantis. Zeng stated that the deal could be completed by January. CATL has a factory in Germany that is six years old, its first one in Europe. It also plans to build a new facility in Hungary. Zeng stated that these plants will be profitable by 2025 and 2026.
Zeng stated that the larger Hungarian facility, which will begin production in 2019, will produce 100 gigawatt-hours of batteries at a cost base significantly lower than the German plant. These plants are part a CATL strategy to manufacture batteries in Europe, for automakers like BMW Stellantis and Volkswagen. Zeng stated that CATL's European businesses are important because of the region's focus on clean energy transition. He called the EU's decision to impose tariffs up to 45.3% for Chinese EV imports, "stupid."
He said that European automakers should partner with Chinese automakers to develop low-cost EVs and long-range hybrids. Stellantis, for example, has partnered with China's Leapmotor to do this.
Zeng stated that China was actually more advanced in this battle. Why not learn from us?
The EU officials didn't immediately respond to comments.
LITHIUM MINING & THE FUTURE BATTERIES
Zeng claimed that he had stopped production in September at the huge CATL lithium center in Jiangxi, in southern China. He said this was because the price for lithium carbonate dropped. This achieved his goal. He began the project in 2022, when prices were skyrocketing.
He said that the intervention of CATL was to "dramatically reduce costs".
CATL has been criticized in China by competitors and others, who claim that its size gives CATL the power to control pricing or competitors.
Zeng stated that CATL did not intend to put rival miners out-of-business by lowering lithium prices. He also recognized the importance of a profitable supply network. Zeng stated that as the largest battery manufacturer, CATL wants to keep oxygen levels high for all.
No reason for the suspension of production has been given. CATL announced its decision in September, saying it would be making "adjustments to production".
Analysts have stated that the Yichun facility of CATL also had higher costs due to its reliance upon a harder type of lithium ore.
Zeng has also downplayed solid-state batteries' potential as the next revolutionary technology.
CATL employs more than 20,000 people in research. Of these, 1,000 are dedicated to solid state batteries. These batteries have been promoted for years as an alternative to current EV batteries that is lighter and more powerful.
Zeng anticipates that CATL will begin a limited rollout in 2027. China's Government has also allocated more than $830 Million to fund industry-wide research on solid state batteries.
Zeng, however, believes that sodium-ion battery technology is a superior option. It could replace up to 50% of the lithium-iron-phosphate batteries currently dominated by CATL. Experts have stated that sodium, unlike other battery materials is abundant and cheap. Its chemistry can also reduce the risk of fire in EVs.
CATL provides a battery that can be used in electric vehicles. It is a combination of sulfon-ion and lithium-ion. (Reporting and editing by Brian Thevenot, Matthew Lewis and Kevin Krolicki in Ningde)
(source: Reuters)
