Battery partnership between Volkswagen and Chinese company

German automaker Volkswagen is joining forces with CATL to strengthen its local supply chain in China and develop V2G technology (vehicle-to-grid). Under the agreement, the two companies aim to develop cost-competitive and high-performance batteries. The partnership also covers various projects in areas such as battery recycling and battery replacement. “By deepening our cooperation with CATL, we will create high-performance, cost-effective battery solutions. Our key mission is to establish a strong local supply system,” said Alfonso Sancha, Vice President of Volkswagen Group China. TARGET TO INCREASE DECREASING MARKET SHARE IN CHINA Volkswagen Group sold 2.9 million vehicles in China in 2024. This number means 10% fewer sales compared to 2023. The German giant is taking important steps to strengthen itself in China, the world’s largest automotive market. Last year, VW announced that it would invest 2.5 billion euros in China. In this context, Volkswagen, which purchased $700 million worth of shares from the electric car startup Xpeng, aims to launch two cars under this name this year. The company will also produce special electric cars under the Audi brand, in partnership with the Chinese manufacturer SAIC, to be sold only in China. LEADERSHIP BELONGS TO TESLA Tesla was the company that achieved the greatest success last year in China, the country with the highest sales of electric vehicles in the world. Tesla's Model Y became the best-selling vehicle in China in 2024 with 480,309 units. Tesla was followed by the China-based automotive company BYD Auto. BYD, which has captured a significant share in the market with its affordable electric vehicle models, has become the best-selling vehicle after the Model Y. Volkswagen ranked third after BYD in 2024. The German giant, which does not want to be left behind in the competition, is expected to continue to increase its investments in China. CATL CONTINUES TO GROW CATL, the largest battery supplier in China and the world, has a high market share of 45.5 percent in this field. In addition to Volkswagen, the company also provides services to other giant companies such as Tesla, BMW, Nio, Mercedes-Benz, Xpeng, Geely.