Thread by @jpr007

There’s been a new milestone in the extraordinary rise of Contemporary Amperex Technology Co. Ltd., the decade-old Chinese firm that’s now the world’s biggest supplier of electric car batteries and a crucial partner to automakers including Tesla
bloomberg.com/news/newslette…

CATL has become a key force in the global auto sector by dominating EV battery production

The firm accounted for around a third of all sales in the first four months of 2021, ahead of rivals like LG Energy and Panasonic, according to data provider SNE Research

The producer’s Shenzhen-listed shares closed at a record Monday, capping a more than 1,150% gain since their listing three years ago and giving the company a market capitalization of 1.05 trillion yuan ($160 billion), just a shade more than the value of Volkswagen

It’s an advance that’s already transformed the firm’s base in the southeastern city of Ningde, a former fishing hub, into a critical center for battery technology and minted at least four new billionaires – including key executives

CATL is planning expansions that’ll extend that advantage in manufacturing, and deliver a first plant in Europe, close to Tesla’s new facility near Berlin

The company could have capacity to produce more than 480 gigawatt hours of lithium-ion batteries by the end of 2025, BloombergNEF estimates

That’ll be more than its three largest rivals combined

Even so, founder Zeng Yuqun, who’s a confidant of Elon Musk, has been wondering aloud recently about other avenues for growth

"I don't really want to position us purely as a manufacturer of electric vehicle batteries, because it is just our foundation,’’ Zeng told a forum in April at Shanghai Jiaotong University

“I am currently thinking about three directions"

One is the supply of batteries across a range of transportation, not only cars, but two-wheelers and even electrified boats

Increasingly, the firm is also expanding its capabilities in stationary energy storage and last year began a joint venture with utility giant State Grid Corp. of China

The third, intriguingly, is a plan to help supply zero-emission heavy machinery for sectors like mining, and to also enable those industries to make faster advances in switching trucks, diggers and drills to safer, autonomous operation

A key development that Zeng left off his list is CATL’s move into other areas of the electric vehicle supply chain, from mining to chipmaking

Already this year, the firm acquired 25% of a cobalt operation in the Democratic Republic of Congo, adding to investments and joint ventures with producers of lithium and nickel

It was also among participants in a $400 million funding round for AI chip startup Horizon Robotics

If CATL’s bets in new areas succeed, that’ll mean additional upside

If not, the firm’s outlook remains strong on prospects in its core market

CATL is better positioned than rivals to capture fast-rising battery demand, and is boosting profitability through economies of scale, Bloomberg Intelligence analysts said in a recent note