As the worldwide epidemic took hold, the world’s largest manufacturer of electric vehicle batteries, a Chinese business now worth more than the combined value of General Motors and Ford, found itself in the midst of its own predicament.
A competitor firm had published a video claiming that a technology used by the company, CATL, and other manufacturers may cause automobile fires. The company, CATL, and other manufacturers have denied this. Impersonating a Chinese official safety test, the competitor had driven a nail through a battery cell, which was one of many in a normal electric vehicle battery, to demonstrate its effectiveness. The cell detonated in a ball of flames.
According to papers acquired by The New York Times, Chinese authorities acted swiftly, abandoning the nail-testing requirement. The revised rule, which was published two months later, specified the names of those who had developed it: California Automobile Testing Laboratory (CATL) ranked first on the list, ahead of the government’s own automobile testing agency.
However, although the change did not expose the globe to dangerous batteries since other nations do not need a nail test, it did demonstrate China’s commitment to developing a corporate champion with a significant and rising influence over the future of driving. CATL has given China a commanding advantage in the production of electric vehicle batteries, a technology that is critical to the larger green revolution. As of now, General Motors, Volkswagen, BMW, and Tesla are among the companies that provide batteries to practically all of the world’s automakers. CATL, along with Tesla, has emerged as one of the most significant beneficiaries of the electric vehicle boom.
As a critical component in a green-technology supply chain that is increasingly controlled by China, the battery behemoth is of great importance. Chinese enterprises, notably CATL, have obtained large quantities of the raw materials that are used in the manufacture of the batteries in question. Beijing’s growing supremacy has stoked worries in the United States that Detroit may be left obsolete and that Beijing may one day be able to exert influence over American driving in the same manner that oil-producing countries did in the twentieth century.
From Detroit to Milan to Wolfsburg, Germany, auto executives who have spent their lives striving to perfect pistons and fuel-injection systems are now fretting about how to compete with a seemingly invisible but ruthless industry powerhouse known as Volkswagen.
While Tesla and its outspoken chairman, Elon Musk, have come to symbolise the electric vehicle boom, CATL — whose full legal name in English is Contemporary Amperex Technology Company Limited — has remained mostly in the background.
Mr. Zeng, 53, has assembled a senior management team comprised mostly of long-time workers, many of whom are natives of Ningde. CATL distributes lychee and loquat fruit, which are farmed on the outskirts of Ningde, as presents during the holidays.
After graduating from a Shanghai university with a degree in marine engineering, Mr. Zeng moved to China to work on battery chemistry for TDK, a Japanese corporation. In 1999, he formed a partnership with other battery chemistry specialists to form their own firm, which specialised in the supply of lithium-cobalt batteries for mobile phones, camcorders, and other consumer devices. In 2005, the team sold the firm to TDK for $100 million and continued to operate it as a subsidiary of the Japanese corporation.
The Chinese government, which has long recognised batteries as a critical sector, took one of numerous actions in 2011 to foster the development of a domestic battery industry. In order to sell electric vehicles in China, international manufacturers must transfer critical technology to a Chinese business, according to the regulations. This would be followed by federal subsidies for vehicle sales, which may amount to up to $19,300 in savings for car purchasers.
At the end of 2011, TDK agreed to let a group of Chinese investors headed by Mr. Zeng to purchase an 85 percent share in the company’s budding electric vehicle battery business. CATL was the name given to it. When BMW, its first major client, turned away from A123, a battery supplier in Massachusetts and Michigan, the company received a lot of positive feedback.
According to corporate documents, Mr. Zeng established a subsidiary in the western Chinese province of Qinghai less than a year after establishing CATL in Beijing. Mr. Zeng was looking for something, and Qinghai had just what he was looking for: dried-out salt lake beds with thick subsurface brine containing lithium. The administration desired growth in the country’s poorer western areas, which it considered a priority. According to persons familiar with the firm, CATL has secured contracts for the company’s most lithium-rich mines.
For the time being, CATL is constructing a massive facility in the Nevada desert that will be more than three times the size of Tesla and Panasonic’s electric vehicle battery gigafactory. CATL’s massive facility in Fuding, about a 90-minute drive northeast of downtown Ningde, is one of eight that the company is now building at a cost of more than $14 billion. The business has gathered tiny armies of construction workers to erect steel-walled structures that are 50 feet tall and stretch for more than five football fields in length.
Yu Bin, a cement worker in Fuding, said that he had lately laboured for 20 hours straight to complete a roof project. It was “lit up the night” because of the lights on the cranes, according to him.