HONG KONG, March 10 (Reuters Breakingviews) – Chinese battery maker Contemporary Amperex Technology (300750.SZ) posted earnings growth of 61% for the quarter ended December on Thursday. That’s respectable, but slower than the triple-digit figures logged in the previous quarters. The company led by Robin Zeng boasts unrivalled economies of scale, allowing it to drive down costs for clients including Tesla (TSLA.O). Alas, in China, which accounts for four fifths of CATL’s top line, such dominance is drawing unwanted attention.
On Monday, during a meeting between Zeng and Chinese President Xi Jinping, the Party leader expressed mixed feelings about CATL’s 37% global market share. If Xi is concerned Zeng is squeezing out smaller local rivals like CALB (3931.HK), EVE Energy (300014.SZ) and Gotion High Tech (002074.SZ), his administration might seek to redress the balance. The group is chasing overseas opportunities too, but faces scrutiny from foreign policymakers. After all, U.S. President Joe Biden’s Inflation Reduction Act is designed, in part, to reduce dependence on China’s electric supply chain, and Senator Marco Rubio may scupper CATL’s groundbreaking deal to license its technology to Ford Motor (F.N).
Korean rivals Samsung SDI (006400.KS) and LG Energy Solution (373220.KS) increased their own battery installations by more than 50% in January, and BYD (002594.SZ) is moving even faster, according to Bernstein. CATL is facing political and commercial power struggles. (By Katrina Hamlin)
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Keyword: CATL’s battery ram is losing power