‘s headquarters Battery giant CATL over the Chinese coastal city of Ningde. To the untrained eye, the building is like a giant slide rising from urban sprawl. In fact, it’s a huge monument to the company’s raison d’être: the lithium-ion battery pack.
You’ve probably never heard of CATL, but you’ve certainly heard of brands that rely on their batteries. The company supplies more than 30 percent of the world’s electric vehicle batteries, and its customers include Tesla, Kia and BMW. Its founder and chairman, Zeng Yuqun, 54, also known as Zeng Yanhong, has quickly become the king of the industry. Industry insiders describe him as shrewd, direct, and even rude. Under his leadership, CATL’s valuation has soared to 1.2 trillion yuan ($179 billion), more than General Motors and Ford combined. Some of the wealth is built on stakes in mining projects in China, the Democratic Republic of Congo and Indonesia, giving CATL tighter control over an already strained global battery supply chain.
That scale gives CATL enormous leverage — allowing the company to be picky about contracts and push rising raw material prices onto customers. “They’re pretty much setting the terms,” said Mark Greeven, professor of innovation and strategy at the IMD business school in Lausanne, Switzerland. CATL drives clients into long-term, five-year deals. He added that it was reluctant to customize batteries for different automakers.
So far, those decisions have helped Mr. Zeng become rich — very rich.He was ranked 29th Forbes‘ 2022 list of the world’s richest people. He is second only to Tesla CEO Elon Musk on Bloomberg’s 2021 list of the world’s top green billionaires. Musk may make more headlines, but once held nearly as much power.
But it wasn’t Musk. He avoided the limelight and rarely gave interviews. Rather than helping his business, industry insiders pointed out that Mr. Zeng was operating in a disreputable environment. “In the West, a leadership style of a cult of personality is something to be valued, encouraged and celebrated. In China, it’s dangerous,” said Bill Russo, the former head of automaker Chrysler’s Northeast Asia operations in Beijing. Now runs a Shanghai-based automotive consulting firm. “You can’t be bigger than Beijing.” Automakers are also becoming wary of CATL’s electricity as they look elsewhere for batteries to power their cars.
Mr. Zeng’s arrival The EV battery scene dates back to 2010, when he met with Herbert Diess, then BMW’s purchasing manager. Diess, now chief executive of Volkswagen, has embarked on an international mission to persuade companies that make cellphone batteries to switch to electric vehicles. He tried European companies, including Germany’s Bosch. But he also found Zeng, who at the time ran a subsidiary of the Japanese electronics company TDK. At an internal meeting in May 2022, Diess retold the story, describing Zeng’s initial reaction as dismissive — Zeng said he couldn’t have made such a large battery.
But, the story goes, Diess’ request for the battery was put on hold. In 2011, he led a group of Chinese investors to acquire an 85% stake in TDK’s electric vehicle battery business, which they called CATL. BMW was its first big customer. “Diess brought our company into the car battery business,” Zeng told Commercial Daily 2020. “I thank him for that.”
Diess may have inspired CATL to enter the electric vehicle market, but over the years, Zeng has earned a reputation as a founder who can master both the battery and the business. According to Lei Xing, a former editor at Beijing Media, in the early 2000s he bought a U.S. patent for a cell phone battery and worked on improving the battery design himself. China Car ReviewAccording to Feng Yunfei, a researcher at IMD Business School, when BMW agreed to use CATL as its battery supplier, it read the 800-page request line by line.