China has achieved global leadership in manufacturing, but the renminbi (RNB) has failed to come close to the dollar by any measure. Yet, where its currency ambitions might have failed, China seems poised to take the lead in clean energy.

In 2025, leading global battery maker Contemporary Amperex Technology (CATL) launched a car battery that charges in 10 minutes. This is far faster than traditional electric vehicle (EV) batteries.

The technology that underpins this leap forward continues to spread, with energy storage systems increasingly supporting grids powered by renewable energy. In the next century, the global energy exchange could switch, with sodium and lithium ions flowing one way, and the RMB flowing the other.

Batteries powering the future

China dominates battery and energy storage systems, enabling its grid to manage a significant amount of renewable energy input, around 31% of total production. Next year, solar is forecast to overtake coal as China’s leading energy source. In 2024, Asia commissioned 24.7-gigawatt (GW) capacity of BESS (battery energy storage systems), with China accounting for 95% of that storage. This compares North America’s 14.2GW and Europe’s 2.4GW (including the UK) [1].

Then there’s China’s vast fleet of EVs. China bought 11 million of the 17 million EVs sold last year, dwarfing sales in every other market. Chinese cars offer high quality at low cost, attracting consumers worldwide. Chinese EVs can be up to three times cheaper than US or European models. China has overtaken Japan and Germany as the world’s leading car exporter (see Chart 1). Chinese EVs can be seen on the roads all over Asia, Latin America and increasingly in Europe. 

Stock to watch – CATL

Contemporary Amperex Technology Co (CATL) is the leading light of Chinese EVs and battery technology supremacy. Holding a commanding 38% market share across all battery types, the company innovates at a startling pace. CATL spearheads industry technological advancements across various dimensions. 

Before 2016, lithium iron phosphate (LFP) batteries dominated China’s passenger EV market due to their lower barriers to entry and costs compared to nickel cobalt manganese (NCM) batteries. Most top battery producers focused on LFP technology, but CATL was quick to see the potential in high energy-density batteries. It invested significantly in NCM technology, while industry peers prioritised cost reduction. This bold approach has cemented CATL’s position as the global leader in the sector. 

Earlier this year, China’s BYD Auto unveiled the super-fast charging 10c battery, which takes just 10 minutes to charge for a 400-kilometer (km) range. In response, CATL unveiled the Gen 2 Shenxing battery, offering the same charge but within extended 520km range.

Last year, we visited one of CATL’s new Chinese factories. The engineering prowess was impressive with much of the process automated, and batteries seamlessly floating along the production line. CATL recently listed on the Hong Kong Exchange, with the shares rising by 16% on the first day and giving the group a market capitalisation of USD166bn. 

Battery manufacturing is emerging as the most attractive part of the EV value chain, with hundreds of OEMs (original equipment manufacturers) competing for market share. However, only CATL has increasingly demonstrated its pricing power.  

Despite playing a pivotal role in the global transformation in energy and transportation, CATL still offers value and an attractive yield. The stock trades at 15x price/earnings and is expected to grow by 20% this year. With strong fundamentals, we think it  can compound at 15% annually, while paying out 50% of its profits and offering a 2.8% yield. The future of EV batteries has arrived [2]. 

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Companies are selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.