CATL’s Outsized Share of World’s EV Cell Market Highlights Risks

It’s hard to overstate the reach CATL has in the world’s electric car market.

Contemporary Amperex Technology Co. Ltd., as the company is formally known, ranks among the biggest Chinese firms to ever be blacklisted by the Pentagon. 

But it’s its extensive presence across automobile supply chains that has the potential to severely upset the world’s car industry should automakers have to find an alternative.

About one in three electric cars have a CATL battery under their hood. As the industry’s dominant supplier, it’s little wonder some may feel nervous now CATL is in the spotlight after being cited by the US Defense Department for alleged links to the Chinese military.

Other companies now in that basket include gaming giant Tencent Holdings Ltd.

While the designation only impacts each company’s ability to supply to the US military, there’s the tough to quantify — and more problematic — reputational hit.

Ningde, Fujian-based CATL has a who’s who of global automakers as its customers, stretching from Elon Musk’s Tesla Inc. to Ford Motor Co., Volkswagen AG, Stellantis NV and Japan’s Honda Motor Co.

In a statement, CATL said it’s a “mistake for the US Department of Defense to include CATL on a list of Chinese military companies operating” in the US. It added it’s not engaged in any military-related activities besides.

The move by the Defense Department came after Republican lawmakers pushed the US government to add CATL to its blacklist in August last year.

CATL’s market share in 2024 was about 37%, well ahead of Chinese rival BYD Co. at 17%, which considering it also makes cars, predominantly supplies itself. Between the two, they’re responsible for over half of the global EV battery market.

The blacklisting comes at an awkward time for CATL, which is planning a second initial public offering in Hong Kong later in 2025 that would possibly raise at least $5 billion. Shares in CATL fell as much as 6.1% on Tuesday in China.

Citibank noted the company’s large contribution to the US EV market, saying that of its 2023 shipments, 4% of its batteries went there while 35% of its energy-storage batteries were headed that way.

Last year, Duke Energy Corp. was planning to phase out energy-storage batteries supplied by CATL at one of the US’s largest Marine Corp bases, Reuters said.

With assistance from James Mayger.

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