Chinese battery giant and Tesla supplier CATL is expanding globally: Here’s why it matters

The world’s largest electric vehicle (EV) battery maker is going all-in on international expansion and could shake up the EV market in the process with its battery-swapping tech rollout.

China’s Contemporary Amperex Technology Co. Ltd. (CATL) is a key player in the global transition to more sustainable transport, with a market share in the EV sector of roughly 38%. CATL’s clients include global players like Tesla, Volkswagen and BMW, with the firm boasting technology far superior to that of Western competitors. 

Despite its outsized impact on the EV industry, the company had mostly flown under the radar until May this year, when it launched the world’s largest initial public offering (IPO) of 2025 to date in Hong Kong. 

The IPO raised 41 billion Hong Kong dollars ($5.2 billion), after CATL stocks surged and an over-allotment option was fully exercised. 

Here is what CATL has in the works following its IPO.

Ahead of its public offering, CATL said 90% of the funds raised by going public would be put toward its expansion into Europe, particularly its under-construction factory in Hungary. 

The company’s 7.6-billion-euro ($8.2 billion) investment into the Debrecen battery plant was first announced in August 2022 and is expected to begin production this year. 

The battery maker has already established a wholly owned manufacturing base in Germany, which first opened in 2023. It has also announced plans to build a battery plant in Spain through a joint venture with Stellantis. 

Bill Russo, founder and CEO of investment advisory firm Automobility, said CATL’s expansion plans appear designed to sustain its global leadership and scale, citing limited growth momentum in its domestic market and rising competition.

“CATL’s early mover advantage helps lock in long-term contracts, and pricing power is stronger in Europe, supporting higher margins compared to China,” Russo told CNBC by email.

“The Hungary plant is a strategic gateway into the EU market,” he added. “Hungary offers proximity to major OEMs, government incentives, and lower labor costs — making it an attractive hub for Chinese EV and battery players seeking a foothold in Europe,” he added.

CATL’s global investments follow a trend of more Chinese EV companies, including auto giant BYD, shifting to Europe amid aggressive competition and price wars in the domestic market. 

Speaking at the World Economic Forum in Tianjin, China, on Thursday, Ni Jun, CATL’s chief manufacturing officer, said the brutal discount war would not end without intervention from Beijing. 

He added that, if a big player continues to cut prices, it could lead to other competitors being driven out of the market and create a monopoly. While CATL’s Jun did not name any companies, CATL’s main competitor BYD announced price cuts in late May. 

Tight margins and overcapacity in China have been a driving force in CATL’s Europe push, said Tu Le, founder and managing director of Sino Auto Insights, adding that the company is already supplying “virtually every” EV maker in China, limiting domestic growth opportunities. 

But not everything in Europe has been easy. The bloc placed punitive tariffs on made-in-China EVs last year, following an even more severe crackdown in the U.S. 

Le said that the Hungary facility is another major step toward the company’s localization plans and that it will lead to lower labor costs and a geopolitically friendlier environment when compared to Germany. 

CATL is also involved in an integrated electric vehicle battery project in Indonesia. According to local media reports, government officials expect production to begin in March 2026, which could give CATL a presence in the growing EV market of Southeast Asia. 

CATL said in a recent interview with The Financial Times that it also plans to roll out its battery-swapping and recycling technology to Europe, in a move that could have significant ramifications for the regional market. CNBC has contacted CATL for further details. 

Modern battery-swapping technology, while popular in China, is yet to take off in Europe. Chinese EV maker and battery-swapping pioneer Nio is one exception. The company has introduced 60 battery swap stations across Germany, the Netherlands, Norway, Sweden and Denmark.

Jeep and Dodge maker Stellantis, meanwhile, recently partnered with U.S.-based Ample to integrate battery swapping technology to a fleet of 100 Fiat 500 EVs in Madrid, Spain.

The experience of using a battery swap station is thought to be very similar to using an automated car wash. The EV driver parks the car on a platform with an integrated system, which removes the depleted battery from beneath the vehicle and replaces it with a fresh, fully charged one. The whole process takes about five minutes.

Advocates of battery charging through a swapping station say the technology solves a number of issues, particularly relating to fast charging and long-term performance — two major sticking points for the widespread adoption of EVs.

Analysts say another key benefit to swapping is that it allows car manufacturers to maintain ownership of the battery, which lowers the initial price of the vehicle and creates a regular revenue stream for the OEMs.

Some drawbacks, however, include high initial infrastructure costs and a lack of standardization across car manufacturers.

Connor Watts, battery raw materials analyst at consultancy Fastmarkets, said CATL, which has a number of partnerships with Chinese OEMs, is well positioned to implement the necessary level of product standardization across its customer base.

“And particularly following its recent influx of cash from its Hong-Kong listing, it has the necessary capital to develop infrastructure within the European market,” Watts told CNBC by email.

“Of companies that could succeed in developing the European battery swapping industry, none are better placed than CATL considering its market position,” he added.

Julia Poliscanova, senior director for vehicles and e-mobility supply chains at the campaign group Transport & Environment, said major carmakers would have to agree to a standardized cell design for battery-swapping technology to work at scale in Europe.

“Battery swapping is a good addition to the charging space, and in some parts of the market it makes sense … but it is not a silver bullet to solve our problems,” Poliscanova told CNBC by phone.

“We will still need batteries and we will still need materials for them, whether they are swapped or whether they are in the car permanently,” she added.