CLSA released a research report stating that while Tesla Motors (TSLA.US) has awarded a second energy storage system (ESS) supply contract to South Korean battery manufacturers—a development seemingly unfavorable to Contemporary Amperex Technology Co., Limited (03750)—the global ESS market's robust growth necessitates broader supplier participation beyond CATL alone. The firm emphasized that a more significant catalyst for CATL would be a potential breakthrough in the U.S. market, contingent on improved tariffs or policy conditions, which could substantially boost market confidence. CLSA maintained its target price of HK$685 for CATL and reiterated an "Outperform" rating.
The report noted that CATL's market position is less negatively impacted than it appears. Assuming Tesla's ESS business growth aligns with CLSA's projected 19% compound annual growth rate (CAGR) for the U.S. ESS market from 2026 to 2030, even after accounting for supply contracts awarded to Samsung Electronics and LG Energy Solution, CATL's remaining ESS supply would still achieve a 14% CAGR during the same period. By 2030, CATL could retain an 85% market share, underscoring its significance. Furthermore, given current market expectations near zero for CATL's U.S. opportunities due to tariff uncertainties, short-term impacts are expected to be minimal.
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