CATL Prioritizing Overseas Expansion as EV Price War Persists | Company Business News

Contemporary Amperex Technology Co. Ltd., the world’s largest electric vehicle battery maker, is making overseas expansion its “No. 1 priority” as intense competition in China’s domestic car market threatens the industry’s health, according to Chief Manufacturing Officer Ni Jun.

Everyone in the sector and the government knows irrational competition “is unhealthy and will destroy the industry,” Ni said in an interview with Bloomberg on Wednesday during the World Economic Forum in Tianjin.

His comments echo those from BYD Co. Executive Vice President Stella Li, who said in an interview earlier this month that the EV price war it helped spark was “very extreme and tough.” Li also emphasized that it would be “unsustainable.” BYD, which makes cars as well as batteries, is a competitor to CATL.

In response to the latest round of price cuts, Chinese authorities have chided companies for “rat race competition” and summoned heads of major brands to Beijing. However, it’s unlikely price competition will end while there’s still a huge overcapacity issue in China’s automobile market.

CATL for its part is “trying to do everything to improve production utilization” amid the challenging landscape and has been navigating optimal strategies for global expansion, Ni said. He added there’s increasing need for “high quality batteries” as the world moves toward a sustainable future.

In CATL’s vision, factories will undergo significant transformations. They’ll become “greener,” with extensive improvements aimed at reducing energy consumption and emissions; “smarter,” with machines and robots undertaking labor intensive or dangerous tasks; and crucially, “reconfigurable,” which will allow for quick and flexible adaptation to new products, Ni said.

The Chinese battery giant began deploying artificial intelligence itself seven or eight years ago, Ni said, initially for simple, repetitive tasks and manual work. Today, AI applications have expanded significantly and are not only used for screening battery materials but also play a crucial role during manufacturing and in after-sales services, he said.

CATL is also exploring diverse business models for regionalized production to support its global ambitions. That includes a wholly owned factory in Germany, as well as an under-construction plant in Hungary where some production lines are dedicated to specific automakers, who will also share part of the cost.

But Ni said building the factory in Germany was much more expensive than elsewhere due to factors like land, labor and operational inefficiencies. The company realizes now it can’t think like how it does in China, where land is provided at a cheap price to large corporations.

The company is working on reducing the space needed and re-engineering structures and equipment in order to fit in more production line. Training staff overseas was more difficult too due to different working styles. Going forward, CATL may export ready-to-assemble modules, so when they get to their destination, locals can just plug it in and go.

“We learned from all the mistakes and we are trying to make sure all the mistakes we made in the previous production site will be corrected,” he said. “As a result, our Hungary facility will be very competitive.”

CATL’s Hungary factory is expected to be operational later this year.

With assistance from Adrian Wong.

This article was generated from an automated news agency feed without modifications to text.