CATL’s battery ram is losing power

CALB

10/03/2023 04:12

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
       HONG KONG, March 10 (Reuters Breakingviews) - Chinese
battery maker Contemporary Amperex Technology  300750.SZ  posted
earnings growth of 61% for the quarter ended December on
Thursday. That’s respectable, but slower than the triple-digit
figures logged in the previous quarters. The company lead by
Robin Zeng boasts unrivalled economies of scale, allowing it to
drive down costs for clients including Tesla  TSLA.O . Alas, in
China, which accounts for four fifths of CATL’s top line, such
dominance is drawing unwanted attention. 
    On Monday, during a meeting between Zeng and Chinese
President Xi Jinping, the Party leader expressed mixed feelings
about CATL’s 37% global market share. If Xi is concerned Zeng is
squeezing out smaller local rivals like CALB  3931.HK , EVE
Energy  300014.SZ  and Gotion High Tech  002074.SZ , his
administration might seek to redress the balance. The group is
chasing overseas opportunities too, but faces scrutiny from
foreign policymakers. After all, U.S. President Joe Biden’s
Inflation Reduction Act is designed, in part, to reduce
dependence on China’s electric supply chain, and Senator Marco
Rubio may scupper CATL’s groundbreaking deal to license its
technology to Ford Motor  F.N . 
    Korean rivals Samsung SDI  006400.KS  and LG Energy Solution
 373220.KS  increased their own battery installations by more
than 50% in January, and BYD  002594.SZ  is moving even faster,
according to Bernstein. CATL is facing political and commercial
power struggles. (By Katrina Hamlin)
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 (Editing by Pete Sweeney and Thomas Shum)
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