Exclusive From The Electric: How China's CATL Keeps Trouncing Its Battery Rivals
Lingbo Zhu was scribbling on a sheet of paper last week, sketching out a lineup of batteries that no other company could match. Zhu is international chief technology officer of China’s Contemporary Amperex Technology Ltd., the world’s largest battery maker, which took another leap forward last week.
Just days earlier, on the eve of Europe’s largest auto show in Munich, Zhu stood on a stage and added a blockbuster new battery called the Shenxing Pro to CATL’s lineup. As we reported, he said the battery could deliver almost 400 miles of driving range and, when it needed more juice, a driver could add 210 miles of range in 20 minutes.
Now, sitting with me at CATL’s sprawling exhibit at the show, he sketched out more of CATL’s offerings. They included a battery that is ultra cheap and offers modest range, and another that costs more but goes farther.
Then he offered a peek into the future. CATL was working on a battery that was both relatively cheap and offered even longer range. But it wasn’t quite ready yet. When I pressed Zhu on the details, he conceded that this version couldn’t be charged enough times to go into an electric vehicle.
He was excited about it nonetheless. If it worked, the battery chemistry that CATL dominates—a mix of conventional lithium, iron and phosphate, known as LFP—could capture 90% of the market. “Then this will be a huge hit,” he told me.
CATL’s dominance is really China’s dominance of the global battery market. One of CATL’s primary advantages is its vertical integration, with ownership of key lithium mines, stakes in component manufacturers, and by far the world’s largest global constellation of battery gigafactories.
CATL’s success shows how China has come to dominate the battery industry. The company has stuck with the conventional LFP battery chemistry, but squeezed out efficiencies in production and performance, while obsessing over quality. Western battery manufacturers, meanwhile, tried to leapfrog current technologies with new chemistry but mostly failed to get their batteries to market.
Though Beijing gave CATL the upper hand—forcing foreign automakers to use its batteries—the company’s manufacturing prowess allowed it to win over these captive customers and win a gladiatorial fight with Chinese rivals. It is one of the world’s premier global manufacturing brands, on par with Taiwan’s TSMC, Toyota and Hon Hai Precision Industry, the assembler of Apple products.
Today, CATL owns 38% of the lithium-ion battery market, far ahead of its closest competitors—China’s BYD at 18% and South Korea’s LG Energy Solution 11%.
How CATL delivered top performance with its Shenxing Pro battery explains why it will be so difficult to unseat the company from its industry dominant position, or even erode its market share. The battery’s cathode, which is responsible for the greater driving range and fast charging, comes from Shenghua New Material, in which CATL owns a 17% stake.
Shanghua found a better way to make the cathode, said Sam Adham, head of battery value chain at CRU Group, a battery research firm. To improve performance, Shenghua significantly reduced the size of the particles within the cathode powder, winnowed out impurities and more uniformly coated the cathode with carbon, according to a new report by CRU. Because the particles are so small, they can be packed far more densely within the cathode, which is the change that delivers the better performance. “It’s precise process control. It's a higher material standard,” Adham told me.
CATL was so impressed that it made a $70 million advance payment for 80% of Shenghua’s production through 2029. Chinese EV makers scrambled to tie up what remained of Shenghua’s production. CATL’s big western customers, Tesla, Ford General Motors and Volkswagen, missed out and are stuck with an earlier generation of its batteries, which don’t provide the same fast charge or driving range. Though a handful of Chinese companies have announced a similar cathode, Shenghua’s product delivers by far the best results, Adham said.
Beijing is treating all of these advanced cathodes as a strategic technology: It has prohibited CATL, Shenghua and other companies from exporting the machines that make the cathodes and the know-how behind them.
Western startups are trying to compete: Vivas Kumar, CEO of Mitra Chem, a California startup that uses the same LFP chemistry as CATL, told me his company had developed a similar advanced cathode that is under evaluation by potential stationary storage customers. But it could take years to get through these trials and move into production.
Zhu, who earned his Ph.D. at Georgia Institute of Technology, was among the first employees hired at CATL. In 2011, Zhu was working as a scientist at Dow Chemical in Michigan. That was the year CATL was launched, and its chief scientist, Wu Kai, was visiting Dow. “He was trying to find some materials, and at the same time he also tried to find people,” Zhu said. “I’m one of them.”
In 2015, Zhu and CATL got lucky. The Chinese government imposed a rule requiring foreign automakers to use locally made batteries if they wanted to qualify for EV subsidies. Only CATL had the free capacity to manufacture batteries of international quality at large scale, and it got all the business. BMW, GM, Mercedes-Benz, VW and later Tesla all became its customers.
By 2017, CATL was the world’s largest battery maker, a designation it has held ever since. Western rivals speak of CATL as invincible. They shy away from producing anything CATL has set its own mind on, knowing they can’t beat it on cost or quality.
Geopolitics could change the game. South Korea’s LG Energy Solution has begun making LFP batteries in Michigan, and GM plans to do so in Tennessee in 2027. But the LG plant uses a conventional LFP cathode, and not the advanced version that CATL is launching. Unless it can get its hands on advanced LFP, GM seems likely to be behind as well.
In other words, CATL is still likely to be on top.
Zhu recalled that, in CATL’s first plant, it took 15 seconds to make each battery cell. Today, the company makes one cell every second. Zhu’s team isn’t stopping, he said—it’s working on multiple batteries, including some with exotic chemistries.
“Of course, there is a lot of failure sometimes,” he said. “But we really believe science and technology always move forward.”