Despite government restrictions, American automakers, including Ford and General Motors, are increasingly adopting Chinese CATL battery technology.
Ningde, China-The world's largest battery company's headquarters looks like a giant battery unit, and its helm, billionaire worth tens of billions of dollars, Zeng Yuqun, is confident that Americans will eventually take the initiative to seek cooperation. Washington has been "cold-treating" Zeng Yuqun, China's fourth-richest man, over the past few years. In the eyes of the US government, the Chinese battery manufacturer Ningde era is a geopolitical threat that needs to be protected against through tariffs and national security measures. However, with technology and cost advantages, Ningde era has grown into the world's largest electric vehicle battery manufacturer. Its profit hit a new high of more than $10 billion last year, and it is estimated that one in every three electric cars sold worldwide carries the company's batteries. This is true even without considering the US market-where the electrification process lags behind China and Europe, and there are limitations to the business of the Ningde era. Zeng Yuqun regarded this as a temporary phenomenon.
"The U.S. electric vehicle market will remain small for the next few years, but it will explode after that because this is the trend and the future," Zeng said in an interview after turning 58 on Friday. He pointed out that without the Ningde era to build this future, "it will be very difficult and the cost will be too high". Even in the "winter" of the American electric vehicle industry, there is evidence. Ford recently dropped South Korea's SK Group as a joint venture partner for the battery project and instead focused on plans to build a $3 billion plant in Michigan to produce batteries designed by the Ningde era. Ford is paying an intellectual property license fee for this, which is a workaround in the context of the US building legal and political barriers to prevent the self-built factory in the Ningde era.
General Motors plans to import Chinese-made power batteries from the Ningde era and use them in the new Chevrolet Bolt-a move that is legal but subject to a 60 percent tariff. GM will only sell the model for one year while making long-term plans. At the same time, two U.S. battery factories GM has built with billions of dollars are idle, unable to make the low-cost batteries needed by the car company to support a $30000 vehicle. Tesla's battery factory in Nevada is also using Ningde-era technology to produce energy storage systems. The business has grown strongly, while Tesla's core electric vehicle business has stalled.
Critics argue that embedding Chinese battery makers in US supply chains will make the US more vulnerable to the risk of economic coercion from Beijing and weaken the chances of US companies catching up. Many suspect that the United States will not soon welcome the large-scale entry of the Zeng Yuqun and Ningde era. Last year, the company was included in the Pentagon's list of companies involved in Chinese military cooperation-a description Ningde Times said was wrong. "In the short term, it would be politically 'one step too far' (meaning too much risk) for the U.S. government to make a radical shift in any move that would lead to a relaxation of investment policies for Chinese companies, especially in sensitive industries," said William Zaritt, senior adviser to the business consulting firm Cohen Group and former chairman of the American Chamber of Commerce in China.
Supporting partners say the company holds the key to reducing battery costs and achieving the popularity of electric vehicles. otherwise, the united states may never be able to catch up with china. One of Zeng Yuqun's technology bets drove the company's growth. Other companies have invested tens of billions of dollars to build factories in the United States to produce lithium-ion batteries containing expensive nickel and cobalt. The Ningde era (formally known as "contemporary Aprat") is betting on batteries using cheaper iron. The technology is proven to provide nearly equivalent performance at a lower cost. In the Jiaocheng production base near Zeng Yuqun's office, the company operates 12 battery cell production lines. It's a business model built for today's China, where labor is scarce. The copper and aluminum sheets were coated with the electrode slurry by a machine, and the coated sheet was then rolled up by a large winder and then compacted tightly by a 20 ton press machine. The robot arm is responsible for welding the battery cell components. Occasionally, workers wearing white clothes, hats and masks inspect the process, supplemented by artificial intelligence technology for quality control. With more than 21000 engineers, the company has built up expertise in electrochemistry that is not available in the United States.
"Americans are chasing chips, software and artificial intelligence because 'there's a lot of money to be made, '" he said. He added that batteries are considered "a very stupid industry" in the United States ". Ningde Times, which is only 15 years old, has benefited from a policy introduced in Beijing in the second half of the 2010 s that provides subsidies to electric vehicle manufacturers that use batteries from approved suppliers such as Ningde Times. It also received direct government funding-more than $0.5 billion in the first half of 2024 alone, according to Ningde Times earnings filings. Among listed companies in mainland China, only state-owned petrochemical company Sinopec got more, according to data provider Wande.
Industry experts point out that this iron-based battery chemistry, known as lithium iron phosphate (LFP), can cost up to 30% less per kilowatt-hour than nickel-manganese-cobalt batteries typically produced by Korean and Japanese companies. Last year, Ningde Times developed a LFP battery with a range of 500 miles (805 kilometers), which can be charged to 320 miles (515 kilometers) in just 5 minutes. That's why Ford chose to work with the Michigan plant, said Lisa Drake, a Ford project executive. "If we develop it ourselves, it may take a decade to catch up and have LFP technology," Drake said last year. She lamented that although the LFP battery was invented in the United States, Chinese companies like Ningde Times figured out how to make it feasible in cars. "We just didn't commercialize the technology," she said.When Ford recently shut down EV battery production at its new plant in Kentucky, it turned again to the Ningde era. Ford now plans to use Ningde-era technology to produce utility-scale large-scale energy storage batteries there. Non-Chinese battery makers are racing to catch up. Recently, LG New Energy, the battery division of South Korean electronics giant LG, said it would produce LFP batteries for Tesla's energy storage business at its new plant in Michigan. LG and GM also added that they are retrofitting an electric vehicle battery plant in Tennessee to produce LFP cells for grid-scale energy storage.
Ningde Times next bet on sodium-ion batteries, which are batteries made from sodium compounds in table salt. Salt is much cheaper than lithium and performs better in extreme cold weather, despite having a lower energy density per unit volume. Chinese car company Changan plans to start selling electric cars equipped with Ningde-era sodium-ion batteries in mid -2026. Although Ford and GM both need the battery technology of the Ningde era, the two car companies are also developing new batteries to reduce their dependence on the Chinese giant. "If we only do the LFP that the Chinese will do, we can't win," Kurt Kelty, GM's battery chief, said at a conference in October. "We need to innovate."
In China, Zeng Yuqun is regarded as a national science and technology hero. He was invited to meet with national leader Xi Jinping last year. This month, he was in Beijing as part of an advisory panel to attend China's biggest annual political event. "We will sell Chinese products globally while promoting our technology and standards," he told reporters at the Great Hall of the People in Beijing. For Zeng Yuqun, this is not only about serving low-end and affordable electric vehicles, but also about the cutting-edge technology that Ningde era can provide for high-end cars. Zeng Yuqun said that Americans need the Ningde era because it can supply the latest technology while reducing costs. "For high-end products, it is very difficult without the Ningde era," he said.
Zeng Yuqun observed that self-driving taxis may be the next big hit in the industry, almost all electric vehicles. If Americans give up electric cars, he said, "then you will be left behind in the field of autonomous driving." At present, Zeng Yuqun said he could not build his own factory in the United States. "I have the intention to invest there, but the problem is that in some states, Chinese companies can't even buy land," he said, alluding to restrictions in places like Texas. Still, he looked ahead to a "spring thaw". "Maybe by 2028 that will change because business relationships are always stronger and more enduring than politicians," he said.