The electric vehicle (EV) industry has been evolving rapidly, and battery technology is at the heart of this transformation. One company leading the charge is China-based Contemporary Amperex Technology Co. Limited (CATL), the world’s largest EV battery maker. As automakers are racing to electrify their lineups, many are teaming up with CATL to secure advanced battery solutions.

Volkswagen VWAGY, the German auto giant, is the latest to strengthen its ties with CATL. The two companies recently signed a memorandum of understanding (MoU) to boost lithium battery development in China. This partnership goes beyond just battery supply. It also includes battery recycling and vehicle-to-grid technology, which allows EVs to send electricity back to the power grid. While Volkswagen and CATL have worked together for years, this new deal takes their collaboration to the next level.

Volkswagen’s move comes at a crucial time. The company’s sales in China dropped 9.5% last year as local competitors surged ahead in the fast-growing new energy vehicle (NEV) market. By tapping into CATL’s cost-efficient battery technology, Volkswagen hopes to turn things around and speed up its EV push.

The Rise of CATL as an EV Battery Powerhouse

CATL isn’t just the world’s largest EV battery maker—it’s widening the gap. In 2024, the company captured a commanding 37.9% market share, up from 36.6% the previous year, making it the only battery supplier with a global share exceeding 30%. Its battery installations surged to 339.3 GWh in 2024—that’s up 31.7% from 2023, underscoring its growing dominance in the industry.

Major automakers—including Tesla TSLA, Volkswagen, Ford F, Stellantis STLA, General Motors GM, Honda, Hyundai, Volvo and BMW—have entered into strategic alliances with CATL to secure cutting-edge battery technology and a reliable supply chain. As EV adoption accelerates, these partnerships are becoming essential for automakers looking to stay ahead in an increasingly competitive market.

Strategic Alliances Driving CATL’s Growth

CATL has cemented its leadership in the EV battery supply chain through high-profile collaborations with global automakers. Here are some of its key partnerships.

General Motors China JV: CATL partnered with SAIC-GM to develop a lithium iron phosphate (LFP) battery featuring industry-leading 6C ultra-fast charging. This breakthrough allows EVs to gain more than 200 kilometers of range in just five minutes, addressing one of the biggest concerns for EV buyers—range anxiety.

Ford: GM’s closest peer sources CATL’s LFP batteries for the Mustang Mach-E and F-150 Lightning to keep costs down and improve affordability. Ford is further deepening its collaboration by integrating CATL’s technology into its upcoming $3.5 billion battery plant in Michigan, set to begin production in 2026.

Tesla: As a major CATL customer, Tesla uses the company's batteries in its Shanghai-made EVs, which are exported to Europe and Canada. This partnership enables Tesla to maintain a cost-efficient and scalable battery supply, supporting its growing global production.

Stellantis: In a €4.1 billion joint venture, Stellantis and CATL are building a large-scale LFP battery plant in Spain, with a projected capacity of up to 50 GWh. Set to begin operations in 2026, the facility will support Stellantis’ European EV ambitions by producing high-quality, affordable BEVs across various segments.

BMW: The German luxury automaker relies on CATL for battery supply in models like the BMW i3 and iX3. Going forward, CATL will provide cylindrical battery cells for BMW’s upcoming NEUE KLASSE EVs from its planned factories in China and Europe, each with an annual capacity of 20 GWh.

Pentagon Blacklist: A Growing Challenge for CATL

Despite CATL’s rapid growth, geopolitical tensions could become a hurdle. In January 2025, the U.S. Department of Defense added CATL to its list of "Chinese military companies," citing alleged ties to China’s military. This designation prohibits the Department from engaging in contracts with CATL starting in June 2026 and discourages U.S. entities from collaborating with the company due to potential security concerns.

The blacklisting could impact CATL’s partnerships with U.S. automakers. Tesla, Ford, and General Motors rely on CATL for battery supply, and this move may bring more scrutiny and regulatory hurdles. CATL has denied any military links and is considering legal action to challenge the decision. However, the designation highlights rising U.S.-China tensions in the EV and battery sector.

For U.S. automakers, this development raises concerns about the long-term stability of their supply chains. They may need to explore alternative battery suppliers or expand domestic production to mitigate potential risks. Meanwhile, CATL could accelerate its expansion in markets with less regulatory pressure, such as Europe and Southeast Asia, to sustain growth.

Conclusion

CATL’s partnerships and innovations have helped shape the global EV industry, keeping it ahead in the battery race. Whether it is through next-generation battery innovations, strategic alliances, or new manufacturing hubs, CATL is set to remain at the forefront of the EV battery market. However, its recent U.S. blacklisting adds uncertainty, potentially affecting key alliances. The company now faces a balancing act — expanding its global footprint while managing geopolitical challenges. How it navigates these hurdles will shape its future in the EV space.

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