CATL says that Elon Musk does not know how to make a battery

ROBIN ZENG, founder and chairman of Contemporary Amperex Technology Co. Ltd. (CATL), the world’s leading battery manufacturer, has expressed openness to building a US plant if the political climate under President-elect Donald Trump allows for Chinese investment in the electric vehicle (EV) supply chain.

Barriers to Entry for Chinese Battery Makers

Zeng highlighted that Chinese EV and battery manufacturers, including CATL and BYD, have faced significant trade restrictions in the US, including high tariffs, protectionist policies, and national security concerns. The Biden administration’s policies excluded Chinese-made batteries from EV subsidies, while a Republican-backed bill seeks to limit EV incentives for vehicles using Chinese battery technology, even when licensed by American firms like Ford and Tesla.

Despite these challenges, Zeng noted Trump’s potential openness to allowing Chinese automakers to set up US-based manufacturing plants under conditions that benefit American workers. “I do hope that in the future they are open to investments,” Zeng said.

Current US Collaborations

While direct battery production in the US remains off the table, CATL has established licensing agreements with major automakers:

Ford: CATL technology will power lithium-phosphate batteries produced at a new Michigan plant for the Mustang Mach-E and F-150 Lightning.

Tesla: A similar deal will see CATL technology used at Tesla’s Nevada battery plant, expected to begin production in 2025.

CATL’s Relationship with Tesla

According to Reuters, Zeng shared insights into his collaboration with Tesla CEO Elon Musk. CATL supplies batteries for Tesla’s Shanghai factory, its largest and most profitable facility. While Zeng praised Musk’s focus on AI and autonomous vehicle technology, he voiced skepticism about Tesla’s cylindrical 4680 battery design.

“We had a very big debate, and I showed him [why it wouldn’t work],” Zeng said, citing issues with the electrochemistry. “He was silent. He doesn’t know how to make a battery.”

Zeng also discussed Musk’s tendency to set ambitious timelines for new technologies, often shorter than what is realistic. While Musk acknowledged that these timelines aim to motivate Tesla employees, Zeng cautioned that overpromising can create challenges for those who take the projections at face value.

Future Outlook

Zeng remains optimistic about CATL’s role in the global EV market and the potential for US expansion under favorable conditions. He also expressed alignment with Musk’s long-term vision for affordable, AI-powered autonomous vehicles, despite differing views on specific strategies and timelines.

The evolving relationship between CATL and American automakers underscores the complexities of global collaboration in the rapidly growing EV sector, where innovation must navigate both technical challenges and geopolitical tensions.