Yu’s holding company controls 1.69 percent of CATL, records show. Among them were Pei Zhenhua, a businessman who set up a lithium processing company with CATL, and Yu Yong, the biggest individual shareholder in China Molybdenum, a CATL partner in Congo. It said in a sweeping announcement in 2016 that a “third industrial revolution” focusing on digitization and “new energy” would allow China to take the lead in autos.ĬATL invited a few outside investors to take pre-I.P.O. The company’s success was never assured, but China had let the world know that it planned to dominate the electric vehicle industry. Other early investors, some with deep political connections, did well, too. Zeng and two CATL vice chairmen, who together own a 40 percent stake, rich. Betting on BatteriesĬATL’s initial public offering in 2018 made Mr. It projects that China will keep the lead even after an American buildup, including projects like the planned North Carolina plant announced in early December by Toyota, and would have seven times the United States’ capacity in four years. China has 14 times the electric car battery-making capacity of the United States, according to Benchmark Mineral Intelligence, a London consulting firm. The effort has also made China a giant in electric car batteries. Despite that profitability, the company continued to collect government subsidies last year equal to a fifth of its net income. CATL’s margin last year was 11.1 percent. The auto industry considers after-tax profit margins of at least 5 percent of sales a success. With subsidies and a protected home market, CATL became extremely profitable. switched heavily to CATL for the huge Chinese market. G.M., which had not been notified of the rule, started shipping Buick Velite electric cars in 2016 with batteries made in China by LG, a South Korean company.Īngry consumers and dealers complained that local officials were denying them subsidies, people familiar with the episode said. The government soon said electric car buyers could get subsidies only if the battery was made by a Chinese company. In a written reply to questions, CATL said its investments “guarantee the stability of raw material supply, and avoid sharp price fluctuations.”ĬATL benefited greatly from the government’s drive to get automakers in China to use only locally made batteries. In 2015, it unveiled the Made in China 2025 plan, a guide to achieving independence in major industries of the future, including electric cars, in a decade. CATL locked in contracts for the most lithium-rich deposits, people familiar with the company said. The government wanted development in the country’s poorer western regions. Zeng needed: dried-out salt lake beds with thick underground brine laden with lithium. Zeng had started a subsidiary in western China’s Qinghai Province. Zeng has also secured raw materials close to home.Ĭorporate records show that within a year of setting up CATL, Mr. This year, CATL acquired a quarter of the Kisanfu cobalt reserve, one of the world’s richest, in Congo for $137.5 million. Chinese firms have rushed to secure cobalt in places like the Democratic Republic of Congo, where huge deposits were once mined by an American company. Then, Beijing helped the company soar.ĬATL’s batteries require ready supplies of lithium and cobalt. For gifts during holidays, CATL sends lychee and loquat fruit grown on Ningde’s outskirts.īeijing’s rules helped CATL emerge as an independent company. Zeng, 53, has built a senior management team of longtime employees, many of whom grew up in Ningde. The municipal government has locked down access to a wide array of documents, particularly from the early days of CATL. Its towering headquarters, shaped like an oversize lithium battery, and several of its biggest factories are in his hometown, Ningde, a former fishing village and military base in southeastern China. Its founder and chairman, Robin Zeng, is one of the wealthiest men in Asia, with a fortune of about $60 billion. Advice for Investors: It’s hard to make sense of the head-spinning volatility in the financial markets.Here is what that means for the stock market. Companies and Profits: More companies are expected to announce slowdowns in their business this year.Uncertainty Lingers: Even with the stock market’s staggering run of losses coming to an end, the concerns that drove Wall Street’s panic this year remain unresolved.Our columnist turns to history for answers. Looking Back : Readers want to know how nasty this year’s downturn may become.And it remains difficult to predict what is in store for the future. The State of the Stock Market The stock market’s decline this year has been painful.
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