China’s EV Battery Giant Is Trying to Find a New Road

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Contemporary Amperex Technology Co. Ltd., or CATL plant, covering almost 2 square miles in Ningde, in southeastern China, is designed to produce 60 gigawatt-hours of EV batteries annually, enough to power 1 million Model Ys for Tesla Inc. It’s the flagship manufacturing hub for one of the world’s most important automotive companies. More than 1 out of every 3 EVs made this year had a CATL battery inside, according to data from South Korea-based SNE Research—including cars from BMW, Ford, Honda, Mercedes and Tesla, as well as Chinese brands such as Xiaomi. In May the company raised $5.3 billion by selling shares in Hong Kong, and its 57-year-old founder, Yuqun “Robin” Zeng, is now one of the 30 wealthiest people on the planet, according to the Bloomberg Billionaires Index, with an estimated fortune of $58.3 billion.

But for CATL, as with other companies that come to lead their industries, unique success is creating unique challenges. Growth is slowing in the Chinese EV market, the world’s largest, where more than 50% of new passenger cars sold are either fully electric or plug-in hybrids. BloombergNEF forecasts the country will soon have a surplus of battery manufacturing, with predictable effects on prices. CATL is setting up factories in Europe and Southeast Asia, regions where it hopes to build businesses as successful as the one at home. Zeng has an eye on North America too. But his company has been discouraged from manufacturing in the US by various government policies, and President Donald Trump’s administration has maintained a ban that prevents it from bidding on government contracts—all while gutting measures designed to encourage EV adoption. (Ford Motor Co., which licenses technology from CATL in the US, recently said it would take $19.5 billion in charges related to its money-losing electric operations.) Meanwhile, even in more EV-friendly Europe, governments are growing wary of depending on Chinese companies for batteries and other critical technologies.

CATL is therefore treading a fine line, between being perceived as an essential innovator and an ominous threat. In an interview with Bloomberg Businessweek, Zeng says he intends to push forward regardless, pumping out more and better batteries and pushing CATL’s engineers to develop more ways for customers to use them. “Blindly chasing geopolitical changes would essentially cripple our operations,” he says. “That’s why having a Plan B is a core part of our strategy.” Having built an engine of unprecedented scale to electrify global transportation, in other words, Zeng has no choice but to run it ever faster and further.