CATL, a Chinese battery technology company, saw its shares surge after reports emerged that the company was in discussions with Tesla and other U.S. automakers to license their technology instead of building a plant in the U.S. This shift in strategy comes as CATL is one of Tesla’s main battery suppliers, and the slowdown in North American electric vehicle sales projected through 2023 has impacted the earnings of major producers like Tesla.
According to reports from The Wall Street Journal and Bloomberg, CATL is exploring the possibility of licensing its battery technology to Tesla and other American automakers. The company is also collaborating with Tesla on fast-charging cells and supplying machinery to Tesla’s factory in Nevada. While CATL had plans to build a battery plant in the U.S., those plans have been put on hold as the company now looks to license its technology to American manufacturers instead.
Despite the challenges faced by the industry, CATL’s founder and Chairman Robin Zeng remains optimistic about the company’s future. Zeng stated in an interview with Bloomberg that CATL is focused on increasing production of its more advanced products and has found solutions for faster battery charge times, with plans to further improve charging speeds. Additionally, CATL has an existing licensing deal with Ford to build batteries in a Michigan plant, although the scope of the collaboration has been adjusted in response to changing market conditions.
CATL’s stock in Shenzhen rose nearly 3%, reaching a 4-½ month high, showing stronger performance compared to the blue-chip index. This news comes at a time when many investors are closely watching China’s economic recovery following the pandemic, which has led many companies to delay their expansion plans or even shut down operations altogether. However, China’s growing demand for electric vehicles could provide opportunities for companies like CATL that specialize in this field.
In conclusion, it appears that CATL’s decision to explore licensing options instead of building a plant in the U.S., along with its focus on increasing production of advanced products and improving charging speeds, could be key factors driving its stock price growth. As more investors look towards China’s growing demand for electric vehicles and companies like CATL that specialize in this field, we can expect more interest in these types of companies moving forward.
