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I have to admit — I wrote the article about CATL founder Robin Zeng’s comments on Elon Musk and Tesla batteries quite late last night, and I did not fully tease out what those comments meant. One of our readers, “Pitounet,” did a much better job of that in this brief comment:
“This interview shows that CATL has grown enough not to be afraid of any Tesla retaliation. What it tells us [is] Tesla needs CATL more than CATL needs Tesla. It is also a glowing proof that Tesla has developed a concerning non reciprocal Chinese dependency.”
Some readers were critical of Zeng’s comments and even of our coverage of them. Some had technical arguments and some concluded the article was all about politics. I’ve been covering Tesla closely for 12 years — I’m always intent on seeing where Tesla is actually going, no matter what the noise (pro or con) around the company is. These are big statements from a giant in the industry, and they’d be just as big if they came a few years ago. Though, on whichever side you sit regarding the technical arguments, I would think that you have to acknowledge Pitounet’s comments are correct, and potentially a big deal. Perhaps I actually wasn’t making enough of the political component of this story!
Tesla is a big CATL customer, for sure, but I think it’s true that Tesla needs CATL more than CATL needs Tesla these days. Also, it could even be that Zeng had been given the nod to prod Musk, test him, or at least make it clear who has the alpha role in the relationship between China and the US. China–US tensions have gone back … decades. I recall the same kinds of discussions in the 1990s as we have today. They definitely got heightened under Trump, though, and now Musk is clearly in Trump’s pocket. Anticipating a new Trump term, perhaps the point is that negotiations are already underway, and they’re serious for one of Trump’s biggest new allies.
Overall, the point that Tesla needs China more than China needs Tesla is no secret, and it’s more true today than ever. There’s massive EV production volume and an enormous number of EV companies in China now, and it’s a bit of a crunch time. If one big player from the US could be diminished because of some kind of “scandal” or regulation change, that would open up a lot more business for homegrown Chinese companies. Perhaps Zeng’s comments really are a kind of warning shot to Musk, and Trump by extension (if he cares).
Getting back to the technological or business issues, Pitounet had written this before the other comment: “CATL is the most innovative battery company, it is going to be the TSMC of batteries. So all manufacturers, including Tesla, need them. In battery tech, Tesla has nothing but hype. It has never had anything but hype. 6 years ago, it used to claim that it had a secret sauce while all the tech was Panasonic’s. It is obvious that Tesla is buying off the shelf from almost all major battery makers. The only real in house development has been underwhelming to say the least.” We’ll see how things go from here, but CATL has clearly grown by leaps and bounds in the past few years while we’ve heard very little about Tesla’s battery plans. The latest news from CATL is that it’s making whole EV platforms to try to drive down costs for carmakers and open up the opportunity for more companies to produce cars at low cost. Tesla is betting its growth story on robotaxis and humanoid robots. You can find every opinion under the sun on those things, so we’ll just have to wait and see which opinions are right. To wrap up some of Pitounet’s opinions on all of this, here’s his take on that:
“After multiple years where it thought it would corner the automotive market and have about 40% of this market for itself, Tesla realized that not only is it impossible, but also the Chinese manufacturers were going to eat its launch. So Tesla pivoted in emergency to other growth sectors (AI and robotics). The only problem is unlike automotive, Tesla has no moat and no head start in those industries. Moreover, the aggressive Chinese are already investing big in those techs and some are already ahead of Tesla. So what next?”
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