Hi everybody and welcome to In Good Company. I'm Nicola Tangyan and the CEO of the Norwegian Wealth Fund and today we have an incredible guest. Robin Zhang, the founder and CEO of CATL, the world largest battery producer. Now it's not only the world largest, it's got a whopping 40% of this mega market. Wow. So Robin, how did this come about? How is it possible to end up with 40% of such a big market? No, no, not your 40% to be correct, 37.5% something less than 40. But I think most important is the market needs a lot of the right products to do the immobility. So the right product you need a right technology.
大家好,欢迎来到《In Good Company》。我是Nicola Tangyan,挪威财富基金的CEO,今天我们有一位非常特别的嘉宾,CATL(宁德时代)的创始人兼CEO——Robin Zhang。CATL是全球最大的电池生产商,占据了这个庞大市场的40%。哇,真是令人惊叹。Robin,请问这是怎么做到的?如何能在如此大的市场中占据40%的份额?哦,对,不是40%,确切地说是37.5%,略少于40%。我认为最重要的是市场需要大量合适的产品来推动电动出行。要有合适的产品就需要有合适的技术。
So in our world it's more like a right chemical, right material, which you really have good products. So this good product is finished to the purpose of the consumer. That's why consumers really love it. That's why the customers, OEMs, would like to make these products and put this product into their car. That's why we can power millions of cars.
So despite your incredible market positions, there may be some listeners who don't know what your products are. So just very briefly, what type of products do you have? We have two major products. One is battery. We call it battery for immobility. So you can have the product in Tesla's car, Model 3, Model 1.
So in all the Chinese car makers are also in many of the OEMs cars. So this battery we call it to power the whole car. So it's a Bef, B-E-V. One product is we make a battery for energy storage. You know all the renewable energy like wind turbine and solar cell. That's why you need a storage battery, full-scale storage, regulate the unstable renewable energy surprise, which makes these energy supply become very stable, very predictable and very fit this to the industry use and other use.
It's been the main steps from going from zero to 37.5% world market share. How long has it taken you? Yeah, we take almost 12 years from zero to this 37.5%. The major is not because only these 12 years because our team has been working on this industry for now. It's a quarter century. Twenty-five years ago we started a business with this lithium ion battery, which definitely is for mobile phone, for the notebook, for all the consumer electronic applications. So we have the similar technology from twenty-five years ago.
Who do you consider your competitors? Today I think competitor is ourself because we don't have, we still have a lot of to do, especially on the electrical chemical side. You know the material today, we still in the case of material like lithium ion phosphor and NCM, and the material still on the graphite as some silicon. Most important is the new chemistry we have to invent.
So only invent new chemistry can also fit more usage, more requirement from consumer, for example, low temperature performance. You say that your competitor is yourself. Are you not worried about any other competitors? I don't consider them as competitors. Actually, we're loved to have more people join in this journey, which really can have the inventions. It's not a copycat. It's the inventions which can help to make the consumer and make the customer happy with the real good performance of the products and technologies.
Because only the competition in innovation, competition in creativity, which can help this industry very healthy to grow in the future. And how important is state support in getting to that type of position? But in China, it's more complicated because Chinese try to make a lot of products which fit to the consumer usage. So Chinese OEM more like we call it, hearing more requests from the consumer, then they make a good design faster than anyone else in the world.
That's why they can grow out a lot of good products. So in order to support the Chinese OEM on this aspect, the theater has been well trained to how to quick fast-grass the needs and how to quick fast- We have more than 20,000 people, engineers, very good talents in my area because they need a focus on many aspects. But I mean, 20,000 is nearly as many people as live in my hometown. So what do they do? This 20,000 people is focused on basic materials, structures.
Some people focus on siloations. Some people focus on the inter-relations of materials. Some people focus on the future chemistry. For example, we call AI for science. I need to use artificial intelligence to try to find out the necessary evolutionary material in the chemical system beyond the lithium ions. We need to have some research guide on the battery management systems and the software.
All together, like 21,000 engineers, they have several hundred PhDs and many, many masters. The low sea anchors have been working here for every more than three or five years. They have become a very good talent and I hope they can have more innovations in the future to help the human climate changing focus on these renewable energies.
The talent pool you have is incredible, right? I saw that two out of three widely cited papers on battery technology came out of China, only 12% coming out of the US. Also, you in China have more than 50 graduate programs in batteries compared to only a few in the US. So how can the rest of the world possibly compete with you? Almost 12 years ago, when Angela Merkel visited China, we have some discussions among that. Let them, German people already thinking about how, why they cannot make a good battery? It's because they make a medical engine, they make a very good gear boss. So you know, German people saying they can make a medical battery.
Let's try, when we have some discussions on that, I told them, unfortunately, unfortunately this is, China have a lot of universities still working on the electrical chemical. So usually, electrical chemistry is a very low-end people looking at it because if you graduate from electrical chemistry, you cannot find a good job, you know? You can only find people for less batteries. You only find a job for the anti-closions. So all these kind of low-paid jobs. That's why they are being very old and filthy.
But I know, United States, a lot of good universities and students, they don't want to focus on this. They want to focus on finance and focus on semiconductors. They need to get higher pay from the lease. But China, there's a lot of students who have to go into university. That's why they find more study on the electrical chemistry. That's why we have a lot of talents compared to US, compared to Germany. So if US-Germany wants to catch up or want to overtake in the battery side, probably let's have to start from education.
Have you got a view on the amount of talent we have in Norway? I think all 20,000 people in your hometown are all talents. So we need to find out what kind of talents to fit, what kind of use. It may not be electrical chemistry. What's the most difficult thing? Is it to invent a battery? Is it the scaling of battery production? And is it more difficult to make one or to make a thousand? So most difficult things is understanding our electrical chemical system in the real world. And other things follow is like, as I mentioned, you have to blast 20-25 years.
So let's draw how you did that. And accurately, the accessibility test indicates that it's a very glitch-like kind of level. It's another difficulty in the reliability. So the scale-up production and low cost. They're looking for very low cost battery because they always compare the battery with the gasoline engine, internal combustion engine, which have developed more than 100 years, optimize and optimize. That's why they put too much burden on the batteries.
It just seems like in Europe there is such a problem scaling up production. Is there one common thing that's particularly difficult here? I talked to many people, the European battery makers, CEOs, while they cannot make good products. It's because they have a well-run design. And secondly, they have a well-run process. Certainly, they have well-run equipment. How can they scale up? If they want to scale up a lot, they would have a new utilization problem. And later on, they would be a reliability problem. And two years or three years later, they would be a safety problem.
So almost all mistake together. So I don't know how. That doesn't sound so good. But if we start with the first one, and when you say they got the wrong design, what do you mean? Yes, stuff from the wrong design. It means that if they don't understand the electrical chemistry or the silo-e-e-slamation that the design would be wrong. They never cover the risk of the future risk.
That's why the performance in testing in one day looks good. Then you want to scale up. They want to put the process, the process never cover what you need in the future. What are the implications for European battery production, then, given what you were saying, where do you think Europe is going to be in 10 years' time? For the battery application side, we will just tell about at least the immobility and both also, and the even the bullet-trang and the chai.
Since Norway is definitely the very advanced nations for this renewable energy, maybe we can work together to make a planning. To make Norway the whole Norway becomes a zero carbon society. So I have a confidence how to mapping out electricity. The zero carbon is important. You have almost 90% of the high-jole power. Then you add up another 10% maybe from wind turbine from the sea. Another size is immobilities.
Your passenger car penetration is already 95% of the new cars. Then we can also help you to make these trucks to be zero carbon by our swapping battery system. Also, we can make a lot of modifications. Also, we can also help even the vessel with the range of standards. We can plan together to make a whole Norway as a number one in the world to be the zero carbon technology renewable energy nations in the world.
I think it will take around 10 years in 2025. What together will we make it? Also, you would be very happy to have a lot of income from all these different things. Well, it sounds very interesting. Unfortunately, it's above my pay grade, not my decision. I only invest money. Of course, we are happy that we have invested a lot of money with you. Now, you've been doing batteries for a long time. Do you feel that innovation is accelerating or decelerating? I don't feel too much. It's actually as a relation. You know, when the industry is small, when we start from mobile phone, the technology like growing, like a line or assets relations. But when we put more money and more people inside now, everyone looking for innovations. So, innovation space is accessible. And we believe there will be another new industry, a new chemistry come out.
That's why when we put our product in the way of our production line, we have to put the production line, have to depreciate faster. The depreciation has to be five years otherwise we want it. So new things come out. So a lot of companies, which kind of solid-state batteries is a game changer. What are the showstoppers here? Well, I've been in the police for many, many times of the different people. The basic showstoppers is still the interface, solid and solid interface. Whenever we have a custom material with the electrolyte, solid electrolyte, solid powder, so in the inner material or solid powder, solid, solid interface definitely the problem of the diffusion. The speed of the diffusion is almost two orders less than liquid electrolyte.
That's why people have to put the pressure, to put the two solid powder together, very heavy pressures that make it work. But in a real application days, how can you get the heavy pressures? So that's why it is a fundamental science and technology issues. But we have to overcome different things, different new invention of materials, new invention of the process. So it takes time. So in terms of technology, at the initial level, I put level 4. You also in the sodium ion and condensed matter batteries, how do you view these technologies? The sodium ion is quite mature now. We already have a small production to the similar car makers. The only problem is that it's a little bit lower energy density compared with our phosphate today.
When our phosphate is cheaper, people tend to select the ion phosphate a lot of the sodium ion. But we have developed in the second generation of sodium ion, which can be very good compared with the first generation. So we believe it would be a 20% to 30% of the placement of the phosphory in a smaller car on a shorter range of the cars at an initial stage. That's a condensed matter battery. I'm proud of that because it is very good in the Ewoto application. It's very expensive today. And we are working hard on that, trying to make it maybe two times compared to today or 1.5 times. So we can use this battery to the very high end car, which needs energy density for the speed and the higher range.
When you look at your process and so on, what's the key to your successful supply chain? I mean, you, for instance, all on your own lithium mine, right? What are your advantages in when you look at your supply chain? Usually people have to look at the supply chain by the applications. For example, several years ago, people said, wow, nickel, cobwe is very important because the battery will go into big applications. That's why you need to have in West in nickel, especially in cobwe mining.
But they don't understand that we can have making the structure change in the way to reduce the cobwe applications. So cobwe from 33% reduces to 3%. And also even now, we can remove the cobwe, then we use the iron phosphate, and the cobwe becomes zero. Nickel becomes zero. So not only the technology people who understand the trend of the development applications in the future, who to know, who to choose, what kind of mining is a good mining investment. That probably is our advantage. So we have to very carefully understand the advantage of the different materials, especially where the chemistry system, for a little bit of the winter, then we can judge.
And how do you benefit from this when you set up factories in Europe? We have two facilities in Europe, one is in Germany, now one is in Hungary. Now the supply chain, we established a supply chain gradually, now still majority from China. That's why, for example, in Norway, we definitely can work together because you have a very low cost of hydropowers. So we can make graph graphite together. So graphite is one of the most important is energy consumption.
The patient talk about energy storage, how do you see that market developing? Energy storage in my mind is similar, or maybe half, maybe half size of transportation. But energy storage is more difficult than transportation, because they need lasting 20-25 years. But many people think this is easier because they say this is a stationary pull-not-not move, yes or no. Number two is energy storage unit is a huge pack.
For example, 1-kilowatt battery pack, whole system, it contains at least 1.5 million cells. You think about 1.5 million cells plus all the electronics, mechanical, thermal management put into the system and then processing this software, the whole 1-kilowatt battery's energy storage system contains maybe 9 million of the components, similar as the Boeing 787. So when you control your quality in one out of PPM, that means every day you have the product, you have the components and problems. You have the maintenance costs in the future and also degradation is the difference. Consistency is very, very difficult to control.
Let's try for the same thing, we want to put the battery manufacturing quality up to PBB and one different parts per billion. So three orders increase the quality level to fit for the usage of this energy storage. So it's difficult. Everyone, if you tell you it's good, 10 years later they have to pay a lot of money.
How much time do you spend on the corporate culture at CATL? What do you think defines the culture compared to other companies? In other cultures we have the vision, we try to be a very innovative technology company in the world, especially focus on renewable energy and try to do the excellent contribution to the human society in renewable energies. On the other hand we try to create a platform which helps individuals to fight, to grow their spiritual spirit and material wellbeing. Actually it's money. So we need to give them more star options and also help them to really fighting for the roles, especially innovations and also the confidence by themselves become a better man. The focus on renewable energy. So people believe very meaningful in this journey, especially working in CATL. Now it's one 15 million cars, 15 million cars in the world powered by CATL batteries. So think about that. You already helped to reduce a lot of carbon.
On the other hand we are keeping doing these innovations to help the climate change and also sustainability for humans development. We try to gain the same vision and also we are using also Chinese culture, we call it refine.
So everyone has to refine themselves and enable others, then strive and innovation. So we always have how to say successfully introduce a Chinese traditional thinking of refine, enable and strive innovation. And Robin how are you still trying to refine the way you work? For me there is two ways. One is my philosophy. I don't want to be the rich guy, the rich guy or whatever, it doesn't mean it. So I want to share this rich or wealthy to many people, to try to create a good society, especially for sustainability. This is the number one refine for my view of my wealthy.
The question is I need to refine myself to be more strong body. Otherwise it's always tired, you cannot find the passion is very important, otherwise it can last for longer. The third thing I am now trying very hard to find the successes. So this is three things in my mind now, it's like a more top priority.
So Robin I believe you and I we share one thing in common, we both sleep a bit in the middle of the day, we take a little nap in the office. Yes, this is a long time usually we sleep maybe 30 minutes in office.
When during the day do you sleep? 1pm, something like that, start sleeping maybe 30 minutes, it's good enough to recover. And what does that do to you? You become more energetic, maybe the body is physically needed. How long do you work in the evening? I work until a 12 o'clock, around that, until 30. Because usually the whole day is working, sleeping, it's not really an email you have to lessen some information message from overseas. Especially running international companies, you have information across the 24 hours across the clock, but you have to pick up the right things.
And also, yeah, I'm happy to do that. Basically no, not much problem, but I need to do exercise, my daughter told me more. You grew up in rural China, right? In India. Yes.
What do you think that has done to you as a person to come from a rural place, move in being very successful? How has it helped in your business? We have very difficult economics and my hometown is very poor. So for me, in day one, I think we have confidence because we believe we can overcome all the difficulties once we have a chance.
Number two is we have a very strong mind. We are not easy to be beat anywhere because we have experience. Number three is we are not too much looking at the wealthy because we have experienced so poor and we have no problem on that. So we say that if people are almost told me, they're loving, why don't you enjoy your life? You can buy a yard.
For me, there is not much joy. We have to overcome the difficulties to do something great to support people, poor people, and also support the least renewable energy in the world. You will be very happy. So usually I like to invest the manufacturing plan in a related poor area. What kind of projects do you support? My donation is usually go to this very poor children.
We donate some money for them to have some people to care, just talk, touch, or play together. So I joined some international program for the children. I believe if we can see it, it can invest the manufacturing plan in some poor area. So their family no need to move out to come out to the big city to work, to leave the children in the hometown.
So that's why we invest the manufacturing place in Guizhou and everything in the Hernan, all these areas to help them. So such kind of things for me is much happy and maybe more strong in the rural area. When you meet young Chinese people, what advice do you give them? My advice is be patient, strife, because you have your chance.
If you were to give advice to young people in Europe and the US, what would you tell them? I think it's similar. Usually the Chinese kids have want to become rich very fast. So be patient, but a strife, everyone has a chance, I believe.
Robin, it's been tremendous talking to you. It's incredible what you have achieved. And I have to say, I am pretty happy. I'm not your competitor. Thanks, Amelia.