Chinese battery giant CATL and Geely Auto have signed a new agreement to deepen their strategic cooperation in EVs.

The agreement aims to advance power battery technology, integrate product platforms, and improve supply chain systems. This collaboration seeks to address the increasing demand for EVs in China and worldwide.

As a major battery supplier, CATL and Geely, a key player in China’s automotive sector, aim to strengthen their competitiveness in the evolving global automotive market. The partnership is expected to combine their expertise to promote advancements in EV production and technology.

🔗 Source: Huxiu

🧠 Food for thought

1️⃣ China’s strategic vertical integration drives global EV dominance

This CATL-Geely agreement builds upon a foundation established in 2018 when they formed their first joint venture with CATL holding 51% and Geely 49%1.

This collaboration pattern has become a competitive advantage for Chinese EV manufacturers, helping the country secure nearly 65% of global EV sales in 20242.

The vertical integration between battery manufacturers and automakers in China has created efficiencies that are difficult for global competitors to match, with over half of Chinese EVs now priced lower than comparable gasoline vehicles2.

The success of these domestic partnerships has been reinforced by strong government support, including extended tax exemptions and trade-in programs that have accelerated EV adoption across China2.

This latest agreement signals a deepening of what has already proven to be a successful formula, as CATL continues to be the dominant battery supplier in China while expanding its global footprint through partnerships with international automakers.

2️⃣ Battery manufacturing faces overcapacity amid technological transition

While CATL and Geely strengthen their partnership, the global battery industry is experiencing significant overcapacity, with utilization rates in Chinese battery plants currently below 50%3.

This strategic agreement comes at a critical time when battery manufacturers are racing to develop next-generation technologies, with CATL already launching second-generation sodium-ion batteries that offer a cost-effective alternative to lithium-ion4.

The battery market’s competitive landscape is intensifying as manufacturers vie for market share through technological differentiation, with solid-state batteries expected to double energy density and potentially revolutionize the EV market by 2027-20284.

CATL’s extensive partnerships with multiple automakers, including global players like Volkswagen, Daimler, and BMW5, represent a strategy to secure demand channels amid increasing competition and overcapacity concerns.

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