Tesla Battery Supplier CATL Explodes to $203 Billion Valuation

Even while wading through messy lawsuits and skeptical press coverage, Elon Musk seems to have the Midas Touch. Case in point: Chinese electric vehicle battery maker Contemporary Amperex Technology. Also known as CATL, the firm has seen its valuation skyrocket by 62% in the past year, thanks in part to a recent multi-year deal to supply battery packs for Tesla’s Shanghai factory.

The surge in shareholder value is enough to make the battery manufacturer the third-largest company in mainland China as of Thursday.

The Energizer of EVs

CATL has locked up supply deals with numerous non-Musk automakers as well. The firm recently inked an agreement to supply Mercedes-Benz and also sells lithium-ion batteries to NIO, XPeng, and Li Auto — three of China’s largest car manufacturers, which are all witnessing record sales growth.

These agreements have helped steer CATL to a $203 billion valuation, making it perhaps the principal player in the electric vehicle battery market:

• CATL controls 30% of the global EV battery market and over half the market in China.
• The firm managed a 28% profit margin last year and recently posted a first-quarter net profit of $301 million — more than double its earnings from the same quarter a year earlier.

And that’s not all: analysts expect the electric vehicle industry — and with it, the EV battery — to explode in popularity over the next decade. Some experts predict that by 2030, roughly 30% of all passenger cars will be electric — a marked increase from their 4% representation on the road in 2020.

Speaking of Exploding: In November, GM issued a 69,000-unit recall on Chevy Bolt vehicles due to a battery pack fire risk. Now, the automaker is telling all 2017-2019 Bolt EV owners to refrain from both parking inside and charging their cars unattended (sounds like a convenient ownership experience). The Bolt is equipped with an LG Chem battery, meaning CATL is quite literally watching its competition go up in smoke.