Contemporary Amperex Technology (CATL), the world’s largest battery maker, is scouting locations for a new $5 billion battery plant in the U.S., per Bloomberg. But as the Tesla supplier’s acclaim rises around the globe, U.S. trade experts are mulling a tech transfer program akin to the one employed by China with the West.
- CATL has expanded feverishly in the past few years. With the cheapest lithium-ion batteries on the market, the company supplies many of the world’s up-and-coming EV players, including BMW and Volkswagen, as well as Chinese upstarts NIO, Xpeng, and Aiways. CATL has plants all over China and one in Germany.
- CATL has recently made an expansion into North America. In one conventional view, U.S. policymakers should feel threatened by China’s flagship battery maker given the current state of technology competition.
- But a U.S. trade expert told Bloomberg that CATL’s entry in the U.S. is fine as long as the company brings along its manufacturing know-how. “The principle would be largely the same: We’ll give you market access, and in exchange, you have to transfer tech to us and our people,” he said.
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The context: One of the most acrimonious issues in U.S.-China relations is China’s long-standing practice of forcing Western companies to give up their tech — via a joint venture, for example — in exchange for market access. China’s accession to the WTO in 2001 should have made quid pro quo practices illegal, but technology transfers continued unabated.
- There are other reasons for the U.S. to welcome CATL: The company’s entrance could create tens of thousands of jobs, offset a U.S. battery supply-chain shortage, as well as supercharge long-term EV adoption.
- U.S. battery startups, which could theoretically be snuffed out by CATL’s entrance, don’t seem too worried: One battery maker told Bloomberg that piggybacking off a giant buyer could make it easier and cheaper for his company to get much-needed supplies.
The takeaway: That U.S. trade specialists are now openly considering similar tactics in response to CATL indicates a marked turnaround from what was formerly a lopsided technology relationship between two of the world’s biggest economies.
“Is the shoe now on the other foot?” quipped the official Twitter account of Sino Auto Insights, a Beijing-based consultancy.
