The company that supplies more than one third of the world's demand for electric car batteries is to cut costs for a number of Chinese car makers. The move is being seen as offering a competitive advantage to these companies in China but also in Europe.
Chinese car companies are providing stiff competition in terms of prices on the European market.
Batteries account for between 30% and 50% of the cost of an electric car
Already companies such as MG are selling electric cars in countries like Ireland at significantly lower prices than other mainstream companies. When it launches in Ireland later this year, BYD - another major Chinese brand - is expected to follow suit and claims it will offer the "world’s most technologically advanced cars".
According to Reuters, CATL has offered smaller domestic electric-vehicle makers discounted prices on batteries, as long as CATL is their main supplier. A significant price advantage could make Europe and elsewhere attractive places to export to, given the current high prices car manufacturers are charging.
EV prices are often cited as the main reason why car buyers shy away from them.
The CATL company currently supplies several Chinese companies but also global companies such as Volkswagen, BMW, Nissan and Tesla.
"It's very much a market share game,"Caspar Rawles, chief data officer at Benchmark Mineral Intelligence told Reuters. "This is, I think, in part, a price war."
