China's Contemporary Amperex Technology Co. (CATL), which has emerged as the world leader in electric vehicle (EV) batteries by overtaking Japan’s Panasonic, is establishing a new battery production base.
CATL announced that it would set up an EV battery production base in Yibin City, Sichuan Province, China by investing 10 billion yuan (US$1.40 billion or 1.68 trillion won), according to foreign media reports and industry sources on Oct. 1. The company is planning to complete the first plant within 26 months after construction starts and the second plant in two years. Previously, CATL signed a memorandum of understanding (MOU) on investment cooperation with the city government of Yibin to jointly build a new energy industrial base in the western part of China.
CATL is rapidly growing with the Chinese government’s rise in the battery industry and the rising demand for electric car batteries. The company ranked first in terms of cumulative shipments of batteries equipped in electric vehicles until August this year at 19.41 GWh, according to market research firm SNE Research. The figure showed a whopping 107.5 percent growth compared to the same period last year.
Japan’s Panasonic, the second largest electric vehicle battery producer in the world, saw its shipments increase only 60.3 percent on-year to 16.18 GWh. LG Chem had the largest shipments of batteries among South Korean companies at 7.67 GWh, followed by Samsung SDI with 2.4 GWh and SK Innovation with 1.34 GWh. CATL recorded the market share of 25.5 percent in the first half of this year. The figure is higher than the combined market share of South Korea’s top three battery manufacturers – LG Chem with 10.4 percent, Samsung SDI with 3.2 percent and SK Innovation with 1.9 percent. As a result, CATL posted 20.26 billion yuan (US$2.83 billion or 3.41 trillion won) in sales in the first half of this year, up as much as 116.5 percent from a year ago.
The company is expanding its production bases not only across China but also to across the world, including Europe and North America. CATL is currently constructing its first overseas battery plant in Germany and is also considering the establishment of another one in the United States. Market experts also expects that the company will grow further. Bloomberg NEF said the battery production of CATL would reach 120 GWh in 2022. The estimated production of Panasonic is around 105 GWh.
In particular, the domestic battery industry expressed concerns about whether CATL will jump into the energy storage system (ESS) market which has been led by South Korean companies. This is because CATL unveiled its ESS product for the U.S. market at the Solar Power International 2019, the largest conference and exhibition for solar energy in the world. The company also entered into a partnership on ESS batteries with Japanese solar power company Next Energy and Resources last month, expanding its business.