Source: Gasgoo
Chinese battery maker CATL has told its suppliers that it is willing to provide them with financial support to accelerate technological innovation in the field of battery materials and devices.
In a letter to suppliers seen by Reuters, the company said it was willing to bear part of the cost of research and development for suppliers and provide advance payments for related projects to ensure technological progress. In this letter, CATL also said that it is willing to assist suppliers to carry out certification work to accelerate the application and production of new battery materials and help suppliers increase market share.
Image Source: CATL
The above measures are part of the efforts made by CATL to alleviate its supply chain pressure in the fierce price competition in the electric vehicle market. Over the past two years, in the Chinese electric vehicle market, fierce price competition has meant that automakers and auto parts suppliers have faced huge pressure to cut costs. Industry executives and analysts have warned that as companies’ profitability weakens, fierce electric vehicle price competition will force them to reduce research and development investment.
In November this year, CATL’s chairman Zeng Fuyun told Reuters in an interview that he had realized the importance of supply chain profitability and the importance of each stakeholder receiving a reasonable share of profits.
Additionally, according to data from SNE Research, CATL has expanded its global market share in electric vehicle batteries from 35.9% last year to 36.8% in the first 10 months of this year. In contrast, the global market share of South Korean battery manufacturer LG Energy Solution has decreased from 13.9% last year to 11.8% in the same period.
CATL and Stellantis also announced last week that they had reached an agreement to build a large lithium iron phosphate (LFP) battery factory in Spain, which will be CATL’s third factory in Europe. Xu Yuzhong said that CATL’s first two factories in Europe are expected to become profitable in 2025 and 2026.
