This week, a message from the top was sent to CATL, the largest battery manufacturer in the world, as well as to its Chinese competitors.
President Xi Jinping of China expressed his “pleasure and concern” about CATL’s dominance in the market for electric vehicle (EV) batteries, which industry executives and regulators took as a warning to be ready to curtail growth in order to prevent the current boom from imploding in an overcapacity bust.
Xi’s comments, which he made in response to Robin Zeng, the chairman of CATL, making a presentation on the sidelines of China’s annual parliament, demonstrated that CATL has caught the interest of senior Chinese officials. Customers have been criticizing CATL’s market position since last year, and the business has issued its own warnings about the dangers of an industry that is growing too quickly.
Three executives from the battery sector, including two from CATL, as well as two individuals close to regulators working with the sector, told Reuters that they interpreted Xi’s comments as a warning to the organization as well as the larger battery industry.
One of the five, a senior manager at CATL, who, like the others, requested anonymity due to the delicate nature of the situation, stated that Xi’s comments were alarming for the entire sector.
“Pressure is being imposed on all parties,” he said, adding that “even if the government steps on the brake, CATL’s position within the industry won’t be shaken”.
In order to prevent “a boom and a headlong rush that would dissipate in the end,” Xi was quoted by Xinhua as saying that regulation had a place in the development of emerging industries like battery production.
