CATL Closes In On LG As World's #1 EV Battery Supplier; BYD Triples Global Market Share

Chinese EV battery maker Contemporary Amperex Technology Co. Ltd., or CATL for short, is playing an increasingly significant role in the development of energy-efficient vehicles around the world, according to Caixin, the Chinese-language business daily.

The company most notably powers Tesla Inc’s (NASDAQ: TSLA) Model 3 and NIO Inc’s (NYSE: NIO) product lines and recently said it expects to triple its profits in Q3.

Unlike most EV parts suppliers such as Panasonic Holdings Corp (OTC: PCRFY), BYD Company Limited (OTC: BYDDY), or Samsung Electronics Co Ltd, CATL has no international stock market presence outside its home market, with just a single Shanghai Stock Exchange listing.

Lack of capital markets acess hasn’t stopped the company from almost becoming the largest global supplier of EV battery parts this year, however.

During the first 8 months of 2023 CATL has been making sharp inroads on LG Energy Solution Ltd., its Korean rival’s, to almost take top spot among EV battery suppliers.

The situation is one that could become something a leadership battle among EV parts suppliers. From January to August this year, the company supplied 27.7% of the world’s EV batteries vs. 28.5% which are supplied by LG. That’s a huge improvement over last year, when CATL was supplying just 20.8% of global EV batteries vs. 28.3% for LG.

Panasonic’s third-place position sunk from 17.7% share to a 15.4% share, while BYD’s more than tripled, from a 0.5% share to a 1.7% share in the same period. The new data was supplied by Seoul, Korea-based consulting firm SNE Research.

The big growth was the result of a 111% jump in battery supplies the company made in the January to August period, mostly to Tesla, Nio, Mercedes-Benz AG (OTC: MBGAF), Volvo AB (OTC: VLVLY) and SAIC Motor Corp Ltd. The company has more deals in its pipeline with Hyundai Motor Co. (OTC: HYMTF) and Kia Corp. (OTC: KIMTF) too which portend to help it displace LG from the top spot, according to Chinese media reports.

CATL has faced challenges over the past few years with its ambitions to become the number one global supplier of EV batteries. Last month, Ford Motor Co (NYSE: F) abruptly halted construction of a $3.5 billion plant about 100 miles outside Detroit in which it planned to build EVs with CATL batteries. Joe Biden’s Inflation Reduction Act poses a threat too since it contains a clause that eliminates subsidies for automakers that include a certain portion of non-locally made batteries.

Still, that hasn’t stopped CATL from making inroads into the US market. Earlier this year the company sat down with White House officials about prospects for opening a factory in the US to supply Tesla with more of its batteries for US consumers. And as recently as last month, CATL was said to be considering a $1.8 billion IPO on the Hong Kong Stock Exchange.