China abolishes list of battery makers for electric cars

Analysts said as soon as there are new and reasonable choices, it is inevitable that some of CATL's current customers will start to do business with other battery makers to prevent putting all its eggs in one basket.

As China cuts its subsidies and is expected to stop all of them by the end of 2020, Chinese battery makers including CATL are exploring overseas markets and diversifying business. In a statement last week, CATL said it will scale up its investment in a production and research base in Germany up to 1.8 billion euros ($2.05 billion) from 240 million euros.

The investment will be used to construct a lithium-ion battery production base and a center for product research, development and testing, the company said.

Construction is estimated to last at least 60 months, and the project will cover around 70 hectares.

The move will enable the convenience supply of batteries to carmakers in the country and in Europe as a whole. Volkswagen, BMW and Mercedes-Benz are some of its largest customers.

Also in June, CATL announced it is teaming up with fintech firm Ant Financial Services and Alibaba-backed bike-sharing startup Hellobike to establish an electric bicycle battery joint venture.

The joint venture, with an investment of 1 billion yuan, plans to set up a network of storage units allowing riders to pick up charged batteries on the go.

"We've defined the battery-swapping service as a long-term, basic energy source for society, just like gas stations," said Hellobike's Chief Executive Yang Lei.

China now has over 250 million e-bikes and the number is expected to continue growing in the coming years.