Despite stock stress, CATL likely to retain EV battery dominance in China, analysts say
Contemporary Amperex Technology Limited’s (CATL) dominance in the Chinese electric vehicle (EV) market is unlikely to slump over the coming year given its brand recognition and edge in technology, analysts said, though its shares have already tumbled amid the battle with profit-squeezed EV makers. Chinese carmakers have been doubling down on efforts in recent weeks to reduce their reliance on…
Despite a recent 25% loss in share value since mid-August, analysts believe Contemporary Amperex Technology Limited (CATL) is well-positioned to sustain its dominance in the Chinese electric vehicle (EV) market. This is attributed to CATL's strong brand recognition and technological edge. However, the company has faced pressure as Chinese carmakers have sought to reduce their reliance on CATL, forming partnerships with other battery manufacturers.
In August, CATL held over 41% of the Chinese EV battery market, followed by BYD at 21%, CALB at 6.51%, EVE Energy at 5.95%, and Gotion High-Tech at 5.87%. Analysts note that this shift in partnerships, while notable, will likely take a year or two to fully unfold. Until then, CATL is expected to maintain its market share due to the high barriers to entry in the EV battery industry, particularly in terms of capital, technological investment, and talent acquisition.
The EV battery sector's complexity makes it unlikely for carmakers to exclude CATL, especially as the company has built a strong consumer brand through consistent marketing efforts. Some analysts even suggest that CATL's stock may have been oversold, as the diversification strategy by some carmakers has not led to a noticeable decline in CATL's market share or earnings.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
