Carmakers diversify battery suppliers as China backs CATL
AgenciesA publication under China’s industry ministry has pushed back against market chatter of “de-CATLisation” as a growing number of the battery giant’s automotive partners dive...
A China trade publication has countered reports of battery maker CATL losing ground in the market, citing the growing trend of automotive partners diversifying suppliers. The Ministry of Industry and Information Technology (MIIT) argued that such diversification is a typical business practice and should not be interpreted as an attempt to undermine CATL or sow discord between automakers and suppliers.
The move came after several Chinese automakers, including Xiaomi, Li Auto and Xpeng, announced partnerships with alternative battery suppliers or plans to develop batteries in-house this month. This has fueled speculation about a shift away from CATL, with CATL's stock falling about 25% from mid-August levels and nearly 35% from a May high.
CATL remains the leading battery supplier in China's market, accounting for over 41% of the power-battery capacity in August, compared to BYD's 19%. Diversification is not a novel trend; CATL's dominance stems from its large scale, but many automakers have adopted multi-supplier approaches or invested in their own battery production to lessen their dependence on CATL.
The MIIT publication acknowledged China's automotive supply chain's strengths but stressed the need to foster stronger companies rather than weaken the market leader. The commentary warned that debates over "de-CATLisation" could divert attention from the pressing issue of intense price competition in China's electric vehicle industry, which is now affecting higher levels of the supply chain.
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