Something interesting is going on in China, and I’m not exactly sure what to make of it. Typically, I don’t see a lot of rival narratives in Chinese media. One story is often covered the same across the industry, and there’s not a ton of competing narratives arguing with each other. However, there is a kind of messaging war bubbling in the country regarding CATL, the world’s biggest battery maker. I saw a headline in the past week or so about automakers moving away from CATL, moving away from a reliance on the company’s batteries. For those of us who have been following the EV industry and the related battery industry for a long time, we can probably remember when CATL wasn’t at the top of the charts. There was LG Chem, there was Samsung SDI, there was SK Innovation, there was BYD itself, and some others. Then CATL started growing and growing, winning more and more big contracts with notable automakers. Eventually, it climbed into the #1 position, and then it put a lot of space between itself and others. While it was still far from a monopoly, it seemed no one could really compete with CATL. So, it was a little surprising to see this news pop up of a move — within China even — away from CATL. Had CATL gotten too dominant? Was it making things too tough on buyers? Well, now news comes out (of state media agency China Daily) that this media hype against CATL is wrong, misleading, or at least misguided. ” “A Chinese media outlet affiliated with the Ministry of Industry and Information Technology, China’s top industry regulator, published an article on Tuesday calling the recent hype around ‘de-CATLization’ in China’s NEV industry a ‘media farce’,” China Daily writes. “A WeChat account run by the MIIT News and Publicity Center said that automakers adjusting supply chains, adding suppliers, and developing in-house batteries are normal market behaviors. Yet, they have been packaged as ‘de-CATLization’ — a term referring to efforts by carmakers to reduce their reliance on CATL, or Contemporary Amperex Technology Co Ltd, China’s largest and the world’s leading EV battery maker — and even portrayed as confrontation between automakers and battery makers.” Hmm…. Interestinger and interestinger. There’s also a part of the article focused on battery prices that’s a bit odd. “What’s more, the article warned of a concurrent trend: price competition is spreading upstream through the industrial chain. It stressed that batteries are no ordinary standardized component — they directly affect vehicle safety, reliability, lifespan, and user experience. “Citing NielsenIQ research, the article noted that most consumers worldwide can perceive differences in technology and quality among battery brands and treat batteries as a key purchasing factor. Cost reduction matters, but low prices must not be equated with low costs, still less with sacrificing quality.” Is the state news agency arguing that any moves away from CATL (which apparently aren’t really a big deal) should be viewed carefully and skeptically because it’s not just about cost with batteries, it’s also about quality? (Sort of reminds me of people claiming buyers shouldn’t move away from the major Korean battery makers because the Chinese options had less experience and less of a track record for high quality.) Whatever is going on with this, it seems there’s significant controversy over in China about what is happening in the battery industry, what is happening at CATL, and whether it’s something we should pay attention to or something we shouldn’t pay attention to. I’ll admit that I’m a bit confused by it all.
