Robin Zeng: CATL’s Prodigious Gambler
As Europe reels from Northvolt’s bankruptcy, as Goldman Sachs writes off its $900 million wager to a big fat zero in this embarrassing failure, CATL chugs along.
Contemporary Amperex Technology Co. Limited (CATL) is the world’s largest power battery maker, and has been for quite some time. Its innovation and dominance in battery technology is both an undisputed net-positive for anyone who cares about decarbonization and climate change, and a source of heartburn for western policymakers. From Brussels to Washington, politicians lie awake at night stressing out about how to push out this Chinese juggernaut, while propping up their own domestic alternatives. Europe’s response was going all-in on the Swedish Northvolt to a tragic ending. America’s response was scrutinizing the company’s commercial relationships with Ford and Duke Energy, while gaslighting the public that batteries, as in mixtures of chemical compounds that store and move energy, can threaten national security. Yet, CATL chugs along.
Its founder, Robin Zeng (or Yuqun Zeng, 曾毓群), has a story that is as classically rags to riches as Elon Musk’s. Actually, much more “rags” and only somewhat less “riches” than Musk. (Zeng was born in a village in southern China, and he is only the 89th richest person in the world; Musk is the 2nd.) But his membership in the People's Political Consultative Conference, a high-ranking body within China’s governing apparatus, means few will care to analyze his life experiences, both in isolation and in the context of China’s state capitalism-led industrial policy, to draw useful lessons that are hiding in plain sight.
To bring light to some of these blind spots, here is my telling of the Robin Zeng story and the lessons within.
Born Poor, Born A Gambler
Zeng was born in March 1968 in Ningde, a farming village in Fujian province. His parents were peasants. Based on public accounts, he has two other brothers and likely also a few sisters – a large family typical of any peasant family at the time.
Ningde was such a poor place back then that its image of farmers in pointy hats tilling the fields risked looking like a bad Hollywood movie stoking ugly Asian stereotypes. But 43 years after Zeng was born, in 2011, he would start CATL in his hometown and transform it from a backwater town to a battery powerhouse. (CATL’s Chinese name, 宁德时代, literally means “Ningde’s Era”, a decidedly more aspirational and personal name than its straightforward English equivalent.)
Before Zeng could put his hometown on the map with CATL, he had to make it out of there first. Being the most talented and studious among his siblings, Zeng got into the best local high school and, eventually, Shanghai Jiaotong University – one of the most prestigious institutions in China, then and now. As an undergrad there, he majored in shipbuilding. Had he stuck with his major as a career, he would’ve still run into geopolitical tension with the US – superpower collision is all encompassing.
After graduation, Zeng was assigned to work at a state-owned enterprise in his home province of Fujian. (Back then, graduates didn’t look for jobs in the marketplace, they were assigned by the state.) This outcome – from village to Shanghai back to home working at an SOE with guaranteed job security and some prestige – was already an outlier success that made Zeng’s hometown proud. His story could've ended there. But born a gambler, he had other plans.
Less than three months after working at the SOE, he quit! Zeng moved to the neighboring province of Guangdong, more specifically Dongguang, one of the few cities then that has been unshackled by state-assigned employment and fully embraced the endless possibilities and brutal realities of free market competition. He joined SAE Magnetics, a subsidiary of the Japanese conglomerate, TDK Corporation. (TDK’s Japanese identity would be key in CATL’s birth later in our story.)
At SAE, Zeng was quickly prompted from a rank-and-file research engineer to becoming the youngest director of engineering (and the first China-born director) at the company. His bosses also loved him and paid for him to go overseas to learn about making batteries. But because SAE was a foreign-owned company, Zeng’s career ladder there had a ceiling. So he gambled again, this time by joining his two bosses at SAE to start his first battery company, Amperex Technology Limited, or ATL, just one letter away from his destiny.
iPod Moment
In 1999, Zeng’s "farm to battery” story began in earnest. The opportunity he and his cofounders saw was making light-weight lithium polymer batteries and taking away market share from Japanese incumbents like Sony. Zeng’s compatriot and later rival, Wang Chuanfu, who founded BYD in 1995, saw a similar opportunity at around the same time.
Instead of reverse engineering market-leading products, which was BYD’s approach, Zeng and ATL decided to use more than half of its precious startup capital to go to the US to license the best battery-making technology from the best research lab – Bell Labs. But Zeng was disappointed with what he licensed. Apparently, the Bell Labs technology would bloat and sometimes even explode after repeated charging – a non-starter for a battery that’s supposed to go into consumer electronics. While tinkering with the Bell Labs technology, the bloated battery would often explode right in front of Zeng's face!
After numerous iterations and trials-and-errors of different chemical compositions, Zeng finally figured out a safe mixture that could handle many recharges without bloating. This breakthrough led to ATL earning the trust of Apple in 2003, becoming the battery provider of its newly-launched iPod. (This tinkerer’s approach to product innovation would feature prominently in CATL’s internal culture later on.)
As consumers around the world embraced the magic of the iPod – its infinite scroll and seemingly endless choice of songs – it is not hyperbolic to say that we all had Robin Zeng to thank for not having our favorite gadget explode in our pocket.
Soon after ATL’s “iPod moment”, it was flooded with orders from Apple competitors, like Samsung and OPPO. Five years after its founding, it became the largest supplier of lithium polymer batteries in the world. While ATL was rising to prominence, Zeng was also working on a master’s degree in engineering and a PhD in physics (as all born-poor, hardworking overachievers do I suppose), which he eventually earned from the Chinese Academy of Sciences in 2006.
Good times did not last long. Many other battery makers saw the opportunity and began squeezing into ATL’s lane with lower prices, starting a downward price war that put it in a precarious position. Instead of forging ahead, Zeng and his cofounders decided to sell ATL back to their former corporate master, TDK Corporation of Japan, in 2005.
Becoming a “Flying Pig”
After the sale, Zeng stayed within TDK to plot his next move. Around this time, the Chinese government began rolling out policies and subsidies to induce decarbonization and electrification, including power batteries for all types of vehicles. Zeng saw this policy shift as a once-in-a-lifetime opportunity – a new wind that could make “pigs fly” – paying homage to arguably the most viral saying in the Chinese tech startup circle, courtesy of Lei Jun of Xiaomi and Kingsoft fame: “if you stand where the wind blows, even a pig can fly.”
There is only one problem. TDK is foreign-owned, so it could not qualify for any government subsidies. To qualify for policy support and not miss out on his chance to become a “flying pig”, Zeng left TDK, went back home, and spun out his work at ATL to form CATL in 2011.
Starting CATL was Zeng’s third big gamble on his career, and he has started to acquire a reputation and mystique among Chinese entrepreneurs as a frequent, if not prodigious, “gambler”. One often circulated picture of Zeng is him under a calligraphy plaque in his office with the characters: “赌性坚强”, which can be roughly translated to “keep gambling”, “keep your gambling spirit strong”, or something similar. As the myth goes, the plaque was originally in his mentor’s office – fellow co-founder and honorary chairman of CATL, the late Yujie Zhang. Robin Zeng saw it, really liked it, thought it described himself better, and took it.
Since then, whenever Zeng was asked about the calligraphy and its meaning, he fully embraced the gambler persona it bestowed upon him and was fond of telling people that being a good gambler is all about brain power, not physical strength.
Of course, attributing Zeng’s success only to his psyche as a repeat gambler or incessant risktaker oversimplifies the story.
Unquestionably, the Chinese government’s exclusionary subsidy programs that pushed out foreign-owned entities paved the way for a CATL to emerge. Equally important, however, was the competitive environment that also emerged in spite of the subsidies – CATL had to duke it out with no less than 200 other power battery companies, including BYD, China Aviation Lithium Battery (or CALB) and many others.
Besides the ample subsidies and (temporary) lack of foreign competition, a few events tipped things in CATL’s favor that led to its eventual rise to becoming the undisputed “Battery King”. First, one year after its founding, in 2012, it secured a strategically important contract to supply batteries to BMW. At the time, BMW wanted to release an all-electric edition of its 1 Series cars, but was unsatisfied with its collaboration with Samsung and Bosch. CATL earned BMW’s trust early by leveraging the halo of being the team that made batteries for the iPod. It was also more than happy to allocate all of its engineers to work hand-in-hand with BMW engineers, who planted themselves inside CATL facilities with an 800-page battery standard documentation (all in German) to co-design a solution. This close collaboration with BMW gave the young CATL an invaluable stamp of approval. Soon, domestic new-energy vehicle makers like Chang’an and Geely followed suit with their own purchase orders.
Second, some time in the mid-2010s, its rival, BYD, decided to strategically keep its then market-leading battery technology to itself. Wang Chuanfu believed his batteries were his moat in making the most competitive EVs, so he would no longer sell them to other EV makers. This move opened up a wide lane for CATL to sell its batteries to every carmaker who is not BYD and did not want to make its own batteries.
Third, around the same time as BYD’s fateful decision, the government’s subsidies for commercial EVs (think passenger buses) ran out, while support for consumer EVs (think sedans) was boosted. This change favored CATL on a technical level, because at the time, it was deeply invested in developing two subtypes of the lithium-ion battery category: nickel-cobalt-aluminum (NCA) and nickel-manganese-cobalt (NMC). Both of these subtypes were better suited for consumer EVs, because they had higher energy density and could go farther per charge, though they were more expensive to make and had a higher risk of catching fire. Meanwhile, CATL’s competitors, like CALB and others, were more invested in the lithium-iron-phosphate (LFP) subtype of lithium-ion batteries, which was more popular among commercial EVs for having lower power density but more stable thermal stability (as in a lower chance of fire). When the subsidies shifted in favor of consumer EVs away from commercial EVs, the CATL “pig” flew higher with this new gust of wind, while its competitors floundered.
Favorable external events aside, CATL deserves a lot of credit for controlling what it can control – manically focused on always tinkering with elemental chemistry to produce the most power-dense batteries (without explosion), while vertically-integrating its supply chain directly with its balance sheet.
The latter point deserves more elaboration. Every power battery maker needs and wants to have a secure supply chain of raw materials like lithium, cobalt, and whichever other chemical element it decides to add to the mix in its future products. Companies like LG, SK On, and Panasonic would typically establish long-term contracts or some joint-ventures with major mines of raw materials. CATL goes a step further by making direct investments to get on the cap tables of mines of strategic importance – a 25% stake in the Congo’s Kisanfu mine for copper and cobalt, a 100% ownership of a new mine in Sichuan for lithium, a 7% stake in an Australian mine for more lithium.
This approach, though expensive up front, secures its supply chain of key raw materials to a whole new level of control over price and volume over a long time horizon, which helps CATL scale globally while keeping its cost consistently predictable. Others are trying to do the same. BYD has been known to directly invest in mines as well. Tesla has announced plans to dig up its own lithium in Nevada. Nonetheless, CATL’s level of vertical integration via direct ownership all the way down to the mining level is unique in its scale and magnitude.
That’s what it takes for a “pig” to keep flying.
Paranoid like Andy Grove
You’d think the CATL story would just be smooth sailing from here. But that’s not the vibe you’d get from Robin Zeng.
In 2017, while CATL was riding high and beating both domestic and foreign rivals, Zeng penned a famous all-staff letter titled: “Can pigs really fly? When the hurricane stops, what will happen to the pig?” One passage really illuminated Zeng’s psyche, so I transcreated it below:
“We have become a juggernaut in the industry, because our country wants electric vehicles to have a Chinese “heart”, because the Chinese government has provided generous subsidy policies, and because China is the world's largest automobile market. However, while we sleep comfortably on the warm cushions of government subsidies, our competitors are relentlessly fighting for survival. The gap between their progress and our stagnation is small.
Have we ever thought: what if foreign companies return in the second half of the year? Can we still afford to close our eyes and keep sleeping? Will the country still protect companies that lack competitiveness? The answer is obvious.”
Zeng’s dramatic tone and evident paranoia would make Intel's most revered past CEO, Andy Grove, proud. (Grove, of course, famously made paranoia the most desirable trait a CEO could have.) This paranoia also proved prescient.
Two years after Zeng penned this letter, in mid-2019, the Ministry of Industry and Information Technology, a key regulator of the technology sector, canceled the “whitelist” of domestic battery makers that it first published in 2016. This means that CATL and other Chinese battery shops that were on this list, which enjoyed three years worth of special treatment, now had to compete head-to-head with superior foreign companies. All of a sudden, Samsung, LG, Panasonic, and others flooded the previously-off-limit Chinese market. The “wind” (or hurricane) that helped CATL fly vanished.
During the first half of 2020, LG Chemical gained a 15% market share foothold in China and quickly took the global crown in total market share, Panasonic rose to #2, while CATL slipped to the third spot. Covid-19, which initially ravaged China more than anywhere else, further compounded CATL’s challenge, as domestic EV demand grounded to a halt. At the time, 95% of its revenue came from China.
On the technology side, BYD rolled out its new Blade Battery form factor around the same time. It is a LFP-based battery that packs more power-density with a larger surface area for better cooling, which perfectly met the consumer EV market’s shifting taste for LFP over NMC – the type that CATL has been investing in. (The Blade Battery became instrumental in BYD’s showdown with Tesla.)
Facing Covid-induced macro challenges and stiffer competition from both domestic and foreign companies, CATL itself went into survival mode, more than validating Zeng’s paranoia.
Forced Out of His Shell
To lead the company out of this rough patch, the usually publicity-shy Zeng became more front and center.
On the R&D side, CATL quickly started producing LFP batteries too – a hard pivot, but not so hard for a crew who has been making batteries for twenty years and once supplied that now-ancient relic called iPod. Zeng, ever the tinkerer, started pushing the boundaries of technology beyond lithium-ion towards sodium-ion, a new chemical mixture that could be more cost-effective than lithium, whose price was skyrocketing in 2022. The company also waded into solid-state batteries, though this technology, according to Zeng himself, is still many years away from maturity. To fuel this unrelenting R&D, CATL employs almost half of all the PhD’s in electrochemistry that China produces. (According to the company's annual report, in 2023, CATL sports a R&D team of 20,604 employees – 361 have a PhD and 3,913 have a Master’s.)
On the supply chain front, this was the time period when CATL began taking direct stakes in mines around the world, like the aforementioned ones in the Congo, Australia, and inside China.
On the product end, Zeng expanded CATL’s horizon on two fronts. First, the company led the way in popularizing battery-swapping. In early 2022, Zeng made a rare, high-profile appearance touting his company’s battery-swapping stations, which stored 48 lithium-ion battery packs shaped like chocolate bars that could swap into an EV in one minute. An image of Zeng holding up a chocolate bar sitting in an electric car went viral, at least within the contained circle of Chinese EV gearheads and battery enthusiasts. This “battery-as-a-service” product helped force almost every EV OEM in China to standardize on CATL batteries and become its customer. CATL also signed Tesla as a customer, supplying its Model 3, but still not BYD, which remains a walled garden.
The other product direction is expanding a power battery’s use case beyond vehicles into energy storage for renewable sources, like solar and wind, and more frontier technologies. In a rare interview in 2021 between him and Neil Shen of HongShan fame (fka Sequoia China), Zeng revealed his larger ambition of wanting to replace everything that currently burns fossil fuels with batteries. In his eyes, batteries can be at the core of every technology, not just cars, but also energy generation and storage, robots, and future forms of automation. (Side trivia: both Zeng and Shen went to Shanghai Jiaotong University at the same time and graduated in 1989.) In the same interview, he shared his goal of reaching 50-60% market share by 2030.
Marrying ambition with execution with the urgency of survival, CATL re-catapulted itself to the top. According to SNE Research, through the first nine months of 2024, CATL commands a 36.7% market share and sits comfortably in the #1 spot.
In a more recent podcast interview he did with Nicolai Tangen, the CEO of Norges Bank, Zeng shared that CATL batteries are now in 15 million EVs around the world out of 40 million total – a 37.5% market share. Tangen, whose firm is one of the largest sovereign wealth funds in the world and also a long-time shareholder of CATL, was all too pleased to hear that.
Appearing on a friendly, English podcast like Tangen’s, whose show counts finance heavyweights, like Stan Druckenmiller and Marc Rowan, and Mag 7 CEOs, like Satya Nadella and Jensen Huang, as guests is, in and of itself, a major evolution of Zeng’s persona. Whether he likes it or not, CATL’s success only begets more attention and geopolitical scrutiny. This is a macro trend that looks to only intensify under Trump’s second term, where his nominee for secretary of state, Marco Rubio, has been a vocal critic of CATL’s “national security risks”. If Robin Zeng cannot tell his company’s story more publicly, broken English and all, it will be told to him by others in ways that would put the goal of 60% market share out of reach.
By most observations, the man has no discernible outside interests besides tinkering with battery chemistry and building CATL. His only guilty pleasure appears to be a daily, 30-minute nap at 1pm. But when Time Magazine labels you an influential person, there’s only so much you can do to remain comfortably inside your private shell. So expect more of Zeng’s voice in the future as CATL’s business and profile grows.
As for what industrial policymakers, regardless of which country you are trying to build, can learn from the Robin Zeng story?
CATL became CATL because the government helped, but not so much that it became lazy. Competition – first from domestic companies (more than 200 of them), then from foreign incumbents (LG, Samsung, Panasonic) – also helped, battle-testing its technology and supply chain, but not before it got a leg up from the protectionist subsidies first. Finally, and perhaps most intriguingly, it got an innate but prodigious gambler at the helm, who was born too poor to ever feel loss aversion, and simultaneously astute enough to read government policy tea leaves and paranoid enough to always thrive, not die, under pressure.
More simply, it’s about creating a friendly environment with real money on the line for entrepreneurs to get started, invite some worthy competition, then let them cook.