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Chinese battery-maker CATL and German automotive giant Daimler announce a deepening partnership

Written by Theo Koenig - August 19, 2020

Edited by Asaf Kedem

Contemporary Amperex Technology (CATL) and Daimler have worked closely in the past with the battery-maker already agreeing to provide batteries for Daimler’s heavy-duty electric transportation trucks. CATL already supplies batteries to BMW, Toyota, VW among many others, and it is now expected that the company plans to supply batteries for the new Mercedes-Benz ECQ.

As is the case with many automobile manufactures, Daimler builds the batteries for their Mercedes Benz hybrid and EVs themselves. The process of manufacturing battery cells, however, is outsourced to external contractors, notably CATL, who cooperate in the assembly process. And having now started groundwork on their first factory outside of China, in Thüringen, Germany, CATL will hope to be at the center of the European EV industry.

Times have never been better to be an EV battery-maker. The EV market will seemingly remain impervious to the effects of the corona pandemic, at least in comparison to the auto-industry as a whole. The popular Renault e-car Zoe has increased its year-over-year sales by 107% in June 2020. Emerging European markets, such as Germany and France have continued their growth in the EV sector. German manufacturers in particular, seem to be responding to the threat of Tesla, while the market experienced a 40% increase relative to the previous year in EV registrations.

Several key-factors seem to be coming together for the Fujian-based company that went public in 2018. On top of the steady increases in demand, the decreasing prices of batteries suggests that EVs should soon be cheaper to buy than gasoline cars. Furthermore, public sentiment towards EVs seems to finally be making a turn for the good. UK has set 2035 as the year to end sales of non-electric cars, while the city of Amsterdam, for example, recently announced plans to ban non-electric cars in 2030. For CATL, the latest announcements regarding corona-recovery plans will be music to their ears. China, by far the largest EV market, have extended their subsidies for EV to 2022 in response to the pandemic. Germany and France are among other EU nations to increase their EV incentive programs. On June 4th, The German Federal Government announced an economic stimulus package that doubles its current contributions to the EV purchases. The ecological discount will offer up to 10,000 for EVs under 40,000 and subsequently cut incentives for gasoline vehicles.

Auto Trendy’s take:

The current outlooks for CATL and the EVs as a whole, look very promising. The company has not been afraid of causing waves in the past, as was shown with the announcement in early June of the launch of a new battery, capable of powering a vehicle for 2 million kilometers (1.2 million miles). Improving relationships with automotive giants will remain a critical component to their growth strategy. Under the current market spurts, we expect to see CATL as a leader in the EV industry very soon.