CATL hurries its steps to create a joint venture for battery with a Chinese electric car maker

China CATL, the world's largest battery maker, is accelerating the establishment of a joint venture with a domestic automaker. It will be a strategy to strengthen its dominance of the Chinese market and to provide a foothold for cooperation with global automakers.

According to the industry on June 6th, CATL has recently established a joint venture with China's FAW Car Co., Ltd. of RMB 2 billion yuan (about 330 billion won). It is the sixth joint venture CATL has created after Geely Auto, BAIC Group, SAIC Motor, Dongfeng, and GAC. The shares of the joint venture for battery packs between BAIC have been liquidated; however, they are cooperating on their mid-to-long-term strategy until 2023.

As a strategic partnership partner of CATL, not a joint venture, there is Yutong, the largest electric bus company in China. It is formed as Yutong having a stake in the CATL. It is said that CATL supplies 90% of Li-ion batteries, not lithium iron phosphate, which is mainly used for Chinese electric buses.

It also has a strategic partnership with NIO, an EV company called Tesla in China, to supply batteries. It also invested US $500 million in a start-up called BYTON. According to SNE Research, a market researching company, shipments of Li-ion batteries for Chinese electric vehicles last year were 62.3 GWh. Of these, CATL shipped 25.2GWh, accounting for more than 37% of the market in China.

"CATL's market dominance in China is expected to be strengthened further, and the company has already signed battery supply agreements with BMW, Volkswagen, and Daimler, actively pursuing collaboration with global electric car companies," said Kim Byung-Ju, managing director of SNE Research. "The company is discussing the same matter with Hyundai of Korea and Honda of Japan while discussing battery supply for Tesla’s Shanghai Giga Factory. Thus, CATL's global electric car battery market dominance will become stronger."