CATL expands Chinese supply chain amid U.S. political pressure

CATL is expanding its supply chain presence in China through a stake in Chongqing Yaoning New Energy Technology, a Geely-supported company currently constructing a battery factory. This move, recently approved by Chinese authorities, aims to secure strategic advantages in production and scaling.

Simultaneously, the battery manufacturer faces significant headwinds. Major customers are diversifying their suppliers; for instance, Li Auto has transitioned to Sunwoda cells for its L8 model, and XiaomiAuto is planning independent battery projects with CALB and Sunwoda.

On the geopolitical front, CATL is facing scrutiny from U.S. officials. U.S. Transportation Secretary Sean Duffy expressed “deep concern” regarding the business relationships between Ford and Chinese battery suppliers, intensifying discussions about decoupling Western automakers from Chinese technology. To stabilize its market position, CATL has also implemented a share buyback program to counter recent stock price declines.