EV Makers’ Quest for Cheaper Batteries
Chinese electric-vehicle makers are developing their own batteries in order to cut costs and restore profit margins, a trend referred to as “de-CATLization”. Government support for the battery industry resulted in overcapacity, overproduction and price wars, and the move away from CATL's batteries has contributed to a 40 percent fall in the company's share price since May. The text notes that CATL's profits exceed those of China's top ten EV makers combined.
Why it matters: The episode illustrates how industrial policy can generate the overcapacity and price wars that then reshape the industry it originally created.