CATL's efforts to expand overseas markets are now being personally led by its chairman, and the company will add two additional overseas plants to the six it has previously disclosed, according to local media.

Chinese power battery giant Contemporary Amperex Technology Co Ltd (CATL, SHE: 300750) is making expanding overseas a top priority as it sees less room for growth in the competitive domestic market.

CATL plans to add 2 extra factories overseas to the 6 it has previously disclosed, local media outlet LatePost reported today.

At the end of last year, CATL employees' computer desktops were uniformly set up with a slogan which can be translated as "Whoever goes overseas is the hero of the company. Go out and go overseas."

Since then, many employees have sensed that expanding overseas markets has become a major concern for CATL management, the report said.

The No. 1 document issued by CATL's president's office in 2024 was a mobilization letter for expanding overseas markets, sent by chairman Robin Zeng himself, according to LatePost.

Competition in China's domestic market is getting tougher, and there's still plenty of room for CATL to grow overseas, even though the company's overseas share tied LG Energy Solution last year, Zeng said in the letter.

The international situation will change rapidly in 2024, but the trend of new energy is an international consensus, and the temporary uncertainty will instead give more opportunities to those who are capable, Zeng said, according to the report.

CATL's overseas efforts are now being led by Zeng himself, with four co-presidents -- Tan Libin, Huang Siying, Feng Chunyan and Zeng Rong -- in charge of overseas sales, overseas infrastructure, overseas base operations and overseas procurement, respectively, and reporting directly to Zeng.

The company's total number of overseas factories completed, under construction, and in the pipeline has reached eight, and late last year it was in discussions with some of its material suppliers to jointly build factories overseas, according to LatePost.

CATL has previously disclosed six overseas factories: a plant in Thuringia, Germany; a plant in Hungary; a plant in Indonesia; a plant in Thailand; as well as a Michigan plant in the US in partnership with Ford and a Nevada plant in the US in partnership with Tesla.

The company will next build a battery plant in Spain in a joint venture with Stellantis NV and is considering a wholly-owned battery cathode materials plant in Morocco to supply its multiple battery plants in Europe, according to LatePost.

Since the end of last year, CATL's management staff would receive training from time to time to learn how to understand the international environment and international customers.

A participant in the training said that the management, when discussing how to survive next, came up with the answer of expanding overseas markets, according to the report.

CATL, the world's largest power battery maker, installed 259.7 GWh of batteries in 2023, up 40.8 percent from 184.4 GWh in 2022, according to South Korean market researcher SNE Research.

The Chinese power battery giant continued to rank first in the world with a 36.8 percent share in 2023 and was the only battery supplier in the world with a market share of more than 30 percent, up from its 36.2 percent share in 2022.

CATL's revenue for the full year of 2023 was RMB 400.92 billion ($53.4 billion), up 22 percent year-on-year, according to its financial report released on March 15.

The company had revenue of RMB 130.99 billion in 2023, or 32.67 percent from outside China, up from 23.41 percent in 2022.

CATL had RMB 269.92 billion in revenue in 2023 from its home market, or 67.33 percent, down from 76.59 percent in the same period in 2022.

CATL's main products sold outside the country are battery systems, which did not change significantly from the same period a year earlier, it said at the time.

The period of rapid growth the company enjoyed in China has come to an end, with electric vehicle (EV) makers bringing in smaller suppliers including CALB, Sunwoda to reduce their reliance on it, the LatePost report noted.

CATL's growth in China is now affected by two main factors: China's new energy vehicle (NEV) sales growth rate and BYD's growth rate.

The higher China's NEV sales, the better CATL's growth performance; and the bigger BYD's share, the more CATL's share gets squeezed, the report noted.

As growth in the domestic market nears saturation, globalization will be the next most important growth space for CATL, the report said.

Apart from building plants, CATL is also looking to expand in overseas markets through technology licensing.

CATL has been in talks with about 10 OEMs for cooperation under the LRS (License Royalty Service) model, a company spokesperson told CnEVPost earlier this month.

Under the LRS partnership model, CATL provides technology licensing as well as plant construction and operation services to help global OEMs and even the company's peers quickly master battery production capabilities, the spokesperson said.

The model can be a win-win for all parties, with car companies gaining access to technology and learning to make batteries, while CATL gains access to new revenue models and more advanced forms of expanding its presence overseas, the company said.

($1 = RMB 7.2394)

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