An interview was recently conducted with Mr. Zeng Yuqun, the head of the world's leading battery manufacturer.
The conversation began with an inquiry about a standalone microgrid pilot project in Dongying and whether it had met its goals. Mr. Zeng stated that the project is currently progressing smoothly. When asked if the microgrid could operate independently from the main power grid, he indicated that work towards that goal is ongoing, but the timeline has not yet been reached.
CATL is attempting to transform from a battery company into an infrastructure provider for a new energy society. As the top global producer of power batteries, the company held a 39.2% share of the global market in 2025. Its net profit that year was 72.2 billion yuan, surpassing the combined profits of the top ten independent Chinese automakers by market value.
However, the most striking aspect of CATL's recent trajectory is not the consolidation of its battery dominance, but the rapid expansion of its business boundaries. In transportation, its batteries have extended from passenger vehicles to commercial vehicles like electric heavy trucks, as well as to electric ships and aviation, and through battery swap stations to energy replenishment networks. In the power sector, its energy storage battery holds a global market share of over 30%, and its system integration business grew 160% in 2025, becoming a strong second growth curve. In grid applications, it is a leader in distributed microgrid construction and the exploration of grid-forming energy storage stations, while also actively developing flexible grid and virtual power plant technologies. For industry, it provides green energy and zero-carbon operation solutions for mines, steel plants, cement plants, chemical plants, and industrial parks. In critical minerals, it has invested heavily to establish a resource group for supply chain security while accelerating battery recycling and resource circulation. In AI, it has invested over ten billion yuan to become the largest shareholder in veteran data center operator VNET Group and in leading intelligent computing center power supplier Hangzhou Zhonhen Electric Co.,Ltd., securing a role in the era of computing-power synergy. The company has also signed zero-carbon city strategic cooperation agreements with multiple Chinese cities and is accelerating its global layout with investments in Germany, Hungary, Spain, and Indonesia, alongside energy storage projects in Australia, the UAE, and Brazil. Its Hong Kong listing in May 2025 provides more flexible capital for overseas expansion.
Chairman Zeng Yuqun stated that CATL is committed to becoming a "zero-carbon technology company that makes outstanding contributions to humanity's new energy cause."
Expanding the Business Scope
When asked about the logic behind the company's expanding boundaries into areas from commercial vehicles to AI, Mr. Zeng explained that all expansions fall within the company's vision. He emphasized that entry into new fields requires three conditions: a sufficiently large market, high barriers to entry, and adjacent technology where the company can leverage existing expertise. He noted that the company avoids areas where it lacks core competency, such as life sciences. Regarding AI, the focus is on energy solutions for AI-driven data centers (AIDC), not on competing directly with AI firms on algorithms, as AI fundamentally consumes energy.
Pushing Technological Frontiers
On the subject of technology, Mr. Zeng said his primary focus remains on fundamental battery technology and on making CATL the world's best in AIDC energy supply. He downplayed the notion of solid-state batteries as a definitive "holy grail," explaining the significant technical challenges, such as solid-solid interface issues. He stated that solid-state battery technology is currently at a low maturity level (TRL 4) and that commercialization depends on event-driven breakthroughs, not arbitrary timelines. He sees much room for advancement in other areas like high-voltage cathode materials.
Sustaining High Growth
Regarding the sustainability of the new energy construction boom, Mr. Zeng pointed to vast growth potential. Global electric vehicle penetration is around 20%, with trucks below 10%, and ships and planes even lower. New industries like robots require better batteries, and replacing fossil fuels in the grid requires massive transformation. The energy demand from AIDC, where each token represents energy consumption, has enormous, non-physically constrained growth potential, possibly extending to 2060 with carbon neutrality goals.
Avoiding the Pitfalls of Solar
Asked if the power battery industry could suffer the fate of the photovoltaic (PV) sector, which saw major losses in 2025, Mr. Zeng acknowledged the risk if caution is not exercised. He attributed the PV industry's problems primarily to insufficient intellectual property protection leading to cut-throat competition and price wars. He noted similar attempts in the battery industry, with competitors copying technology at 60-70% efficacy and competing on price. He stated that CATL avoids price wars and instead focuses on protecting IP, advocating for national policy, and building an ecosystem. The company's battery-swap model, where batteries are leased rather than sold, is presented as a strategy that demonstrates product quality and protects consumers.
Transforming into a Zero-Carbon Tech Firm
Mr. Zeng distinguished a battery company from a zero-carbon technology company, stating that batteries are just one foundational pillar. The "four beams and eight pillars" of a new energy society require building other capabilities, some through internal development and some via acquisitions. He identified energy storage as the key technology for grid flexibility改造, enabling the shift from stable, fossil-fuel-based grids to intermittent renewable sources. On the Dongying microgrid pilot, he reiterated it is progressing well, with the goal of achieving independent operation. He noted that while China's robust main grid may limit the domestic market for standalone microgrids, overseas demand is significant, especially in regions with high electricity costs. The company aims to perfect the technology in China first, establishing standards and product generations before expanding abroad. The key technical challenge for microgrids is ensuring power supply during extended periods without wind or sun, which involves complex sizing of energy storage systems. He confirmed that CATL is actively exploring grid-side businesses like demand-side management and virtual power plants through its subsidiary, which has been integrating photovoltaics, wind power, and storage for nearly five years.
Securing Critical Minerals
Mr. Zeng dismissed the notion that new energy simply shifts dependency from oil to minerals like lithium, cobalt, and nickel, highlighting the recyclability of batteries versus the combustion of oil. He projected that by 2042, 50% of mineral resources for batteries could come from recycled materials. CATL has established a dedicated resource company and brought in expert advisors to secure supplies of key minerals, employing a dual strategy of direct investment and partnerships to mitigate geopolitical supply risks.
Championing Globalization
On global expansion amidst a fragmenting world, Mr. Zeng expressed no fear of "teaching the apprentice to starve the master," citing Europe's enduring lead in internal combustion engines despite decades of technology transfer. He believes maintaining a technological edge is key. While acknowledging global concerns over supply chain security, he argued that complete self-sufficiency theories are flawed and stressed the need to promote globalization. He emphasized that commercial partnerships are often more reliable than inter-governmental relations. The previously proposed "433" model for sharing industrial benefits among the company, resource countries, and host countries has been adapted in practice to fit local conditions, such as partial local production requirements in Europe. He sees challenges as opportunities for商业 innovation. The company does not set rigid targets for domestic versus international revenue share, instead following market demand like "nomads following water and grass," focusing on creating value for customers.
The Imperative of Endeavor
Mr. Zeng highlighted that commercial viability is the core driver for realizing the zero-carbon vision, as profit attracts participants to build the ecosystem. On corporate culture, he noted that Silicon Valley firms exemplify intense striving, and given the fierce global competition in technology and products, CATL has no choice but to strive hard, as it is not inherently smarter or more resource-rich than competitors. The most time-consuming decisions in the company's 15-year history have been on technology roadmaps, such as whether to pursue sodium-ion or solid-state batteries, due to the massive investments involved. His greatest concern in realizing the grand vision is internal: organizational capability, talent density, and the team's learning ability and passion. He believes internal factors are dominant, and external challenges can be overcome.
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