CATL: It is the world’s biggest battery maker, it powers electric vehicles for Tesla, Volkswagen and BMW, and its EV technology is miles ahead of US offerings, say experts
The world’s two superpowers are so intricately linked that it’s hard to think of a pillar of the economy that hasn’t been strained by tensions between the US and China.
And the next frontline in the economic conflict may be the most fundamental yet: a fight for power itself.
A Chinese company that most people have never heard of is at the heart of the global race to store the clean energy needed to power the green transition in the US and the rest of the world.
China’s Contemporary Amperex Technology Co Limited, or CATL, is an energy storage specialist that is the world’s largest battery maker for electric vehicles (EVs). But despite the fact that the company controls nearly two-fifths of the world’s EV battery market – and has powered cars made by brands including Tesla, Volkswagen and BMW – it has long flown under the radar of US politics. Until now.
US is ‘years behind’
Le says there is an increasing pressure on US companies not to use any Chinese batteries, “but if the US is going to be competitive on the global stage with EVs, through 2030 they’re going to have to use Chinese batteries”.
Critics are worried that using CATL batteries may create a dependence on Chinese technology that could become a vulnerability in the event of souring relations between Washington and Beijing. There are also concerns that US tax subsidies for green technology could flow towards Chinese entities.
Regardless, experts agree there is no clear roadmap for the US to decarbonise its streets without cheap Chinese EV batteries – most likely from CATL or its main rival, BYD.
Michael Dunne, the founder of Dunne Insights, an EV consultancy, says the US is “years behind when it comes to batteries, battery supply chains, critical minerals. This is where our cupboard is bare.”
Dunne says there is now a “sense of urgency” in the US to build up domestic battery capacity but that it would take between five and 10 years to catch up with China. That may not be fast – or cheap – enough to achieve Biden’s goal of two-thirds of new car sales being EVs by 2032.
Last week, energy secretary Jennifer Granholm told a discussion panel: “We are very concerned about China bigfooting our industry in the United States even as we’re building up now this incredible backbone of manufacturing.”
But Granholm also acknowledged that “we need to understand that it is important for people to buy electric vehicles in an affordable fashion,” something that experts say is impossible in the current market without Chinese batteries.
A highly charged political climate
The pushback in the US is already having an impact. Research recently published by Rhodium Group concluded that “Chinese EV and battery companies are increasingly stuck between a rock and a hard place” as they try to navigate their rising unpopularity in the US while Beijing pushes them to internationalise. Between 2022 and 2023, Chinese overseas investment in the EV supply chain in north America decreased from $4.8bn to $2.7bn, according to Rhodium, “driven by regulatory uncertainty and fears over political backlash”.
