Worries loom

CATL's empire now seems insurmountable, as it's already the largest electric vehicle battery maker in the world and it has such a powerful set of alliances with carmakers.

However, a set of figures the battery giant released late last month revealed that its 2018 profit fell 7.71 percent to 3.58 billion yuan, the first time in years, despite a 48 percent rise in its operating income.

Its profit growth rate has been on the decrease - from 1,609 percent in 2015 to 206 percent in 2016 to 36 percent in 2017.

Analysts said increasingly fierce competition will put extra pressure on CATL as the government stops providing subsidies on Chinese companies by the end of 2020, which may mark the start of international battery makers' onslaught for a larger market share in China.

As soon as there are new and reasonable choices, it may be inevitable that some of CATL's customers will do business with other battery makers, if only to prevent putting all their eggs in one basket, they added.

Zeng, who is also chairman of CATL, already appears worried about securing a future without the help of the favorable government policy.

Last year, he sent an internal email to motivate his employees. The title of his letter posed a question: "When the typhoon comes, can pigs really fly?"

Zeng proceeded to use an allegory to caution workers against complacency.

"What happened to the pig after the typhoon is gone?" he wrote, according to the company's WeChat account. The pig is the company, the strong winds are government subsidies, and the danger is that favorable policies won't always be there to provide an uplift.

Chinese battery makers are revving up their counterattack. BYD is selling batteries to others and partnering with carmakers including Changan Auto to build battery joint ventures.

According to the Economic Observer newspaper, BYD is planning to expand its annual capacity to 60 GWh by 2020, as opposed to 54 GWh by CATL.

Analysts said CATL's lead will continue for a while to come, but it's clear that the company will face more pressure than before.

Zeng does not seem obsessed with the championship. In an interview with the Shanghai Security News last week, he said the race is like a marathon and CATL is just in the lead for the time being.

As the company will try to consolidate its position in China, it will explore opportunities to tap into overseas markets as well.

"In the next move, we will go global further and deepen our cooperation with carmakers in Europe, the United States and Japan," Zeng said.

According to Reuters, CATL will build its first European battery cell factory in Erfurt, Germany, starting production in 2021, and scale up its annual production to reach 60 GWh from 2026.

CATL is also a shareholder of Finnish company Valmet, which is planning to build a battery plant in Finland this year.

lifusheng@chinadaily.com.cn