Western tariffs a ‘challenge’ for China’s battery giant CATL

A high-ranking official from Contemporary Amperex Technology Co. Limited (CATL), China’s leading battery manufacturer, expressed concerns about the impact of Western tariffs on electric vehicles (EVs). The executive stated that these tariffs not only present significant challenges for the company but also have negative consequences for consumers worldwide.

The European Union is preparing to implement substantial tariffs on Chinese-manufactured EVs by July 4, citing concerns over unfair competition. This move follows similar action taken by the United States last month, which increased duties on the EV sector. Adding to this trend, Canada recently indicated that it might adopt comparable measures in the near future.

CATL, recognised as the world’s foremost producer of EV batteries, holds a crucial position in the global market. The company has established strategic partnerships with several major automotive manufacturers, including industry leaders such as Tesla, Stellantis, and BMW.

Ni Jun, who serves as CATL’s chief manufacturing officer, addressed the issue during a World Economic Forum event held in Dalian, a city in northern China. Speaking to AFP, Ni acknowledged the gravity of the situation, stating, “I will say this is a challenge.” He further elaborated on the negative implications of these tariffs, particularly for consumers, emphasising, “I believe (the tariffs are) not good for the consumer.”

Ni stressed the importance of providing affordable, high-quality products that contribute to environmental preservation, regardless of the consumer’s geographical location. He articulated CATL’s mission, saying, “Whether you are a European consumer or Asian consumer, we want to have affordable product, high quality, (that) can save the planet.”

CATL’s growth and success have been significantly started by substantial financial backing from the Chinese government. Beijing has prioritised the development of domestic high-tech industries, viewing them as strategically advantageous for the country’s economic and technological advancement. Ni highlighted this support, noting, “China invests heavily in the lithium-ion battery research, development and production.”

However, it is precisely this level of government support that has sparked complaints from Western governments, who argue that it creates an unfair competitive advantage for Chinese companies in the global market. Many of the vehicles affected by the newly imposed tariffs are equipped with batteries manufactured by CATL.

Despite these challenges, CATL is moving forward with plans to expand its operations in Europe, aiming to increase its presence in the region next year. The company, headquartered in the coastal Chinese city of Ningde, is currently in the process of constructing its second European factory in Hungary. This expansion underscores CATL’s commitment to maintaining its global market position despite the growing trade tensions.

In its home market, CATL has experienced remarkable success in recent years, driven by the rapid growth of China’s domestic EV market. Ni highlighted the transformative changes that have occurred in China over the past three decades, noting not only the “massive introduction” of personal car ownership but also the establishment of “the capability, the entire supply ecosystem” for electric vehicles.

This comprehensive development of the EV industry within China has provided Chinese companies with a significant advantage as the world shifts towards more sustainable transportation options. Ni concluded by emphasizing the readiness of Chinese firms to capitalize on this global transition, stating, “There’s already capability for China to go quickly.”

The situation highlights the complex interplay between technological advancement, economic policies, and international trade relations in the rapidly evolving electric vehicle industry. As governments around the world implement various measures to protect their domestic industries, companies like CATL find themselves navigating an increasingly challenging global market landscape while striving to maintain their competitive edge and contribute to the broader goal of sustainable transportation.