CATL Concentrates Authority Over Production in Headquarters
Chinese battery giant CATL announced an organizational restructuring last week, under which some decision-making power will be concentrated in the headquarters to improve efficiency, LatePost reported on January 16.
There are 32 battery and material production bases operated by CATL, and they are now divided into six regions. Regional delineation is not based on geographical distance, but rather on customers and product lines. The Hudong and Huxi bases are located at the CATL headquarters and separated by only one river, divided into Region 1 and Region 2, while a Thuringia base in Germany and Z Base at the CATL Headquarters are divided into Region 4.
Before the adjustment, the top manager of CATL’s bases was the operations director, who reported to Feng Chunyan, the co-president of CATL’s supply chain and operation system, and Feng Chunyan reported to Robin Zeng, the chairman and general manager of CATL. After adjustment, each operation director reports to six regional managers, and the regional managers report to Feng Chunyan.
Feng Chunyan, born in 1975, worked with Robin Zeng for many years. Zeng joined Xinke Magnetic Power Plant in Dongguan, Guangdong Province after graduating in 1989. Later, he participated in the establishment of ATL, which is mainly engaged in consumer electronic lithium batteries, and founded CATL in 2011. Feng also worked in Xinke Magnetic Power Plant, then joined ATL and CATL, and served as senior manager, company supervisor and as co-president of supply chain and operation system in CATL.
CATL said that the adjustment is due to an increase in business volume and the number of manufacturing bases, and this new structure is more conducive to agile response to customer changes, resource mobilization and orderly expansion.
Within CATL, the operations directors of each production base previously had significant authority. Apart from being responsible for the daily production and operations of the base, the directors had the right to appoint, remove and promote employees at the base. They could also set up some customer-oriented research and development projects, while CATL headquarters was in charge of sales, customer distribution, technology, product research and development, raw materials, equipment procurement and product delivery.
A source close to CATL said that the management team of the firm noticed a phenomenon of redundant construction of some production bases last year. After adjustment, some resources could be better shared, improving the efficiency of expansion.
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According to Soochow Securities’ research, in the first three quarters of 2022, the top five customers of CATL were Tesla, Geely, NIO, GAC Motor and XPeng. Tesla’s growth slowed down. Last year, it sold 1.31 million cars, which failed to reach the target of 1.5 million units. GAC and NIO have announced that they will develop and produce their own batteries. Li Auto, another customer of CATL, is also cooperating with Sunwoda to develop batteries.
More new orders in CATL will come from traditional car companies in various countries that have increased their investment in electric vehicles, such as Volkswagen, Hyundai, BMW and Honda, and new players, such as Xiaomi. One key market change that CATL needs to face is a slowing growth rate of China’s electric vehicle sales this year, after the Chinese government stopped subsidies.
