FILE PHOTO: FILE PHOTO: People walk past the R&D centre of Contemporary Amperex Technology Ltd (CATL) in Ningde, Fujian province, China, December 16, 2016. REUTERS/Jake Spring/File Photo Purchase Licensing Rights
HONG KONG, July 30 (Reuters Breakingviews) - Contemporary Amperex Technology (300750.SZ), a company founded in Ningde, Fujian, became the world's largest battery maker by supplying a new generation of electric cars. Now the $276 billion company's founder Robin Zeng wants to ride a global boom in data centres and renewables to charge up his energy storage business. But peers like BYD (002594.SZ) and Sungrow (300274.SZ) are chasing down overseas customers too.
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In 2017, when CATL was preparing its IPO, battery energy storage solutions, or BESS, made up just 0.1% of the company's revenue. Today, the unit accounts for nearly a quarter of the top line. Revenue from this segment grew 88% to 53 billion yuan ($7.8 billion) in the first six months of 2026 and could contribute half of sales as soon as 2030, one executive suggested in June.
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BESS is a strategic hedge against any slowdown in CATL’s core EV business, and it also powers growth outside China. Most of its BESS sales were overseas in the first three months of this year, per HSBC analysts. That matters because international markets are more lucrative: across all segments, CATL’s overseas gross margin was 30% in the first half of 2026, compared with 21% at home. However, competitors want a slice of the action.
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Smaller companies are looking to undercut CATL, which commands a 30% share of the global energy storage market, with lower prices and other perks. Arch-rivals $33 billion Sungrow and $120 billion BYD snag a larger portion of integrated projects that cover all aspects of battery system installation, rather than simply supplying cells, according to consultancy Wood Mackenzie. Many companies are also offering longer BESS warranties of up to 20 years outside China, compared with up to 7 years as recently as three years ago, per UBS analyst Tim Bush.
CATL has already missed out on one major contract: earlier this month, BYD said it will supply 11.3 gigawatt-hours (GWh) of batteries for state-owned energy group Masdar in Abu Dhabi, while Sungrow provides a further 7.5 GWh. That seems to edge out CATL, which Masdar last year named its preferred supplier for the 19 GWh installation, a project the battery maker hailed as “the largest solar and BESS project in the world”.
Markets in the Middle East and elsewhere could become an even fiercer battleground as trade barriers rise in the West. The U.S. on Tuesday introduced new rules restricting Chinese inverters, used to control electric currents. These pressures and more will start to sap Zeng’s batteries.
Context News
- Contemporary Amperex Technology, the world’s largest battery maker, on July 24 said it grew net profit 42% to 43 billion yuan ($6.4 billion) in the first half of 2026, while revenue grew 55% to 277 billion yuan. Battery energy storage solutions (BESS) accounted for 19% of revenue, compared with 16% in the same period a year earlier.
- BYD on July 9 said it will supply 11.3 GWh of energy storage systems for a Masdar and Emirates Water and Electricity project in Abu Dhabi. Sungrow said on May 21 that it will supply a further 7.5 GWh of energy storage as well as solar power equipment for the same project.
- In January 2025, Masdar had said CATL was the “preferred supplier” of 19 GWh energy storage solutions for the project. At the same time, CATL described the planned installation as “the largest solar and BESS project in the world”.
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Editing by Una Galani; Production by Ujjaini Dutta
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Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on X @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.