CATL Investment: Xiamen Signs New 80GWh Battery Project

Thanks to the favorable industrial environment and geographical advantages, Xiamen has always been one of the key areas for CATL's strategic layout in Fujian.

On September 8th, the "High-Performance Lithium Battery Project" invested by Contemporary Amperex Technology Co., Ltd. (CATL) was signed in Xiamen. The project is located in the Dongliao area of the Tongxiang High-tech Zone, covering a total area of approximately 955,000 square meters, and plans to build an intelligent production line for new energy power batteries with an annual capacity of about 80 GWh.

According to the plan, the main construction of the project will be completed in June 2026, with an annual output value exceeding 40 billion yuan after reaching full production. By then, it will further enhance CATL's investment layout in Xiamen and achieve a virtuous cycle of mutual promotion with the development of the local new energy industry.

CATL first established a presence in Xiamen in 2021. In that year, CATL invested 500 million yuan to set up a project company—Xiamen Times New Energy Technology Co., Ltd.—marking its official entry into Xiamen.

In the second year, with Xiamen Times New Energy Technology Co., Ltd. as the main investor, the "Xiamen Times New Energy Battery Industrial Base Project (Phase I)" officially commenced construction. The total investment of the project will not exceed 13 billion yuan, mainly focusing on the construction of production lines for power batteries and energy storage batteries. Currently, the production area of the Xiamen Times Phase II project, with a planned investment of 5 billion yuan, has completed pile foundation construction and entered the main construction phase. The planned 30GWh annual capacity power battery production line is expected to begin trial operation in the second quarter of 2026.

In the third year, the "Electrochemical Energy Storage System Construction Project (Phase I)" invested by Xiamen Torch Group, directly under Xiamen State-owned Assets, commenced. Notably, the project has a total investment of approximately 3 billion yuan and will be operated by Xiamen Demonstration Energy Storage Technology Research Institute, a subsidiary of CATL. It aims to establish an internationally leading platform for energy storage system research, testing, and demonstration technology development.

In addition to the completed projects, CATL has also established a series of companies in the local area, including Times Electric Service, Times Little Orange (Xiamen), and Xiamen Times New Energy. With capacity investment and registered capital combined, it is estimated that CATL's investment in Xiamen has exceeded or is close to 40 billion yuan.

4 billion yuan in funds—what does it mean? According to statistics, from 2018 to 2024, CATL has announced approximately 28 major investment projects, with a total investment budget exceeding 410 billion yuan. In other words, investments in Xiamen alone account for one-tenth of CATL’s total investment amount over nearly seven years.

In four years, Xiamen attracted a "sky-high" investment from CATL, mainly due to its industrial and geographical advantages.

From an industrial perspective, Xiamen has always regarded the new energy industry as a key strategic emerging sector and has set the goal of building an "innovation city for the new energy industry". Among them, Torch High-tech Zone, where Tongxiang High-tech City is located, serves as the main platform for Xiamen’s new energy industry. It focuses on the power battery industry chain and application fields such as the energy Internet. Through a strategy of “external introduction and internal cultivation”, it has gradually established a comprehensive development pattern covering lithium battery materials and components—battery manufacturing—new energy vehicles, energy storage inverters, and energy storage system integration.

Currently, a series of lithium battery industry chain projects have been established in Xiamen, including Zhongke Hualian, China Innovation Aviation, Haichen Energy Storage, Xiamen Tungsten New Energy, and Zhongneng Ruixin Technology. It is worth mentioning that the "Xiamen China Innovation Aviation High-Performance Lithium Battery Project" is Xiamen's first large-scale new energy industry project with an investment of over 10 billion yuan. The two-phase project has a planned capacity of 20GWh and has already been put into operation. The third phase, currently under construction, has a total investment of 25 billion yuan and is expected to produce 40GWh of power batteries and energy storage batteries annually.

From a geographical perspective, Xiamen is not only an important economic special zone in China, a nationally renowned port city, and a pilot free trade zone, but it has also successfully emerged as one of the approximately 20 international comprehensive transportation hub cities that the country is accelerating to develop. Particularly in maritime transport, it relies on the strong transportation capacity of Xiamen Port.Xiamen has alreadyFujian Province has become one of the important export channels for lithium battery products in our country, with over 90% of the lithium batteries exported from here.

In the first half of this year, the sea transportation export volume of lithium batteries from Xiamen Port reached 20,100 TEUs, setting a historical record for the same period. The export volume of containerized lithium battery energy storage systems grew by 38.6% year-on-year, reaching 341 TEUs. This will help accelerate the international expansion of China's lithium battery enterprises and further strengthen the competitiveness and influence of China's lithium battery industry in the global market.

The industrial advantages combined with favorable geographical conditions have contributed to the booming development of the new energy industry in Xiamen. Data shows that in 2024, the output value of Xiamen's new energy industry will grow by 19.4% year-on-year.

With a well-established production capacity layout and leading technological advantages, CATL delivered a good performance in the first half of the year: total revenue reached 178.886 billion yuan, and net profit attributable to the parent company was 30.485 billion yuan, marking a year-on-year increase of 33.33%.

On the surface, Ning Wang and Yi Chi are already the most profitable giants in the entire lithium battery industry chain, but there are hidden concerns behind this.

In terms of business, CATL's sales of power battery systems increased by 18.85% year-on-year, and sales of energy storage battery systems grew by 34.32%. However, the revenue growth was only 7.27% year-on-year, indicating a severe price war in the current industry. Regionally, in the first half of the year, CATL's domestic business achieved revenue of 117.678 billion yuan, but only a slight year-on-year increase of 1.24%. Meanwhile, its overseas business achieved revenue of 61.208 billion yuan, with a year-on-year increase of 21.14%, making overseas markets a new growth point.

In the face of complex market conditions, CATL has chosen to break through from three aspects.

One aspect is the industrial chain layout, aimed at reducing production costs to offset the decline in product prices.

Currently, CATL's industrial chain has extended its reach to various segments of the industry, including lithium mines, nickel mines, anode and cathode materials, lithium battery production equipment, and lithium battery recycling.

In the mineral sector, CATL has successively invested in various domestic and international mineral resource companies such as Zhichun Lithium, Tianyi Lithium, Snowway Mining, and North American Lithium. In terms of lithium battery materials, CATL has suppliers such as Pingnan Times, Guangdong Brunp, Jiangxi Shenghua, and Hunan Yuneng. Among them, Pingnan Times and Guangdong Brunp are controlled by CATL, while Jiangxi Shenghua and Hunan Yuneng have received investments from CATL.

CITIC Securities analysis suggests that in 2024, CATL's self-supply ratio for lithium carbonate is expected to be about 17%, while the self-supply ratios for cathode and anode materials are 12% and 5%, respectively.

Secondly, it involves technological innovation, using innovative technologies to break homogeneous competition and increase product added value.

In terms of technology layout, CATL is both enhancing the upgrade of existing mainstream material systems, such as launching the Shenxing battery, the second-generation Shenxing battery, and Shenxing Pro, which further improve the performance of lithium iron phosphate batteries, and accelerating the layout of next-generation solid-state batteries to gain an early market advantage.

A relevant official from CATL stated that the company is currently leading the industry in solid-state battery research and development, having made significant progress. They expect to begin small-scale production of solid-state batteries in 2027 and aim for larger-scale production around 2030.

The third is the overseas expansion, leveraging a strong supply chain system and leading product capabilities to capture overseas markets.

It is understood that CATL has successively planned and constructed related factories in Germany, Hungary, Spain, and other locations, forming a global production network covering Europe and Southeast Asia. However, this also brings a second concern—changes in overseas policies.

In the past two years, the high trade barriers in overseas trade have posed significant challenges for businesses going abroad. The traditional "cost + scale" approach has seen its advantages diminish, while equity cooperation and technology licensing have emerged as new paradigms for international expansion. These may become key for Chinese lithium battery companies to continue leading globally in the future.