CATL’s Chief Says There’s a Better Way Than Tariffs to Steer Where EV Batteries Get Made

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What’s new: Rather than using tariffs to steer electric vehicle (EV) battery production capacity to different countries, it ought to be spread out based on each one’s stake in the sector, Contemporary Amperex Technology Co. Ltd.’s (CATL) chief said.

CATL Chairman Zeng Yuqun proposed that capacity should be distributed proportionately, with China taking 40% due to its technological edge and the high efficiency of its investments. The Europe and the U.S. together should have 30% and battery material suppliers 30%, Zeng said Tuesday at the 15th Summer Davos in Dalian, Northeast China’s Liaoning province.

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CATL Chairman Zeng Yuqun advocates for EV battery production capacity distribution based on each region’s stake: 40% for China due to its technological edge, 30% for Europe and the U.S. combined, and 30% for battery material suppliers.
China processes over 50% of global lithium and cobalt and has almost 85% of global battery cell production capacity, while Europe, the U.S., and South Korea have 10% or less.
CATL plans international expansions with Stellantis in Europe and Ford in Michigan, aiming to reduce reliance on tariff-based trade controls.

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Who’s Who

Contemporary Amperex Technology Co. Ltd.: Contemporary Amperex Technology Co. Ltd. (CATL) is a leading Chinese EV battery manufacturer. It holds a significant share of global battery cell production capacity and has surpassed LG Energy Solution Ltd. as the top supplier of EV batteries in non-China markets. CATL is actively expanding its manufacturing footprint overseas, collaborating with companies like Stellantis NV in Europe and Ford Motor Co. in Michigan, USA, to set up new factories.

LG Energy Solution Ltd.: LG Energy Solution Ltd. was previously the top supplier of EV batteries in markets outside China. However, it has been surpassed by Contemporary Amperex Technology Co. Ltd. (CATL) in the first four months of the year.

Stellantis NV: Stellantis NV is collaborating with Contemporary Amperex Technology Co. Ltd. (CATL) to establish a factory for low-cost electric vehicle (EV) batteries in Europe. This partnership is part of CATL's strategy to accelerate manufacturing localization overseas as it maintains its position as a top supplier of EV batteries.

Ford Motor Co.: Ford Motor Co. is collaborating with CATL to build a factory in Michigan, USA, for producing EV batteries. This collaboration is part of CATL's efforts to accelerate the localization of its manufacturing overseas.

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What Happened When

November 2023：: CATL announced plans to work with Stellantis NV to set up a factory for low-cost EV batteries in Europe.

Tuesday, June 25, 2024：: CATL Chairman Zeng Yuqun proposed at the 15th Summer Davos in Dalian, Northeast China’s Liaoning province, that EV battery production capacity should be distributed proportionately.

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