$F (+3,88 %)

Ford was suddenly one of the hottest names on Wall Street yesterday. The share price jumped by around 13% to 13.57 US dollars The reason was not a new best-selling pick-up, not classic car news and not a massive jump in profits in the core business, but a new fantasy: Ford as a beneficiary of the AI infrastructure boom.

The focus is on Ford EnergyFord's new business for stationary battery storage systems. The company wants to supply US-assembled battery energy storage systems for utilities, data centers and large industrial and commercial customers. This is where the AI story comes into play: data centers need huge amounts of electricity, grid stability and storage solutions. Whoever supplies this infrastructure is increasingly valued by the market as an indirect AI profiteer.

The actual trigger for the share price jump was a bullish assessment from Morgan Stanley. The analysts see Ford Energy as an underestimated value driver and expect that Ford could conclude major supply agreements with commercial customers or hyperscalers in the coming months. In addition, Ford's license agreement with the Chinese battery giant CATL is suddenly no longer just seen as an EV building block, but as a strategic advantage in the energy storage business.

Particularly exciting: Ford plans to produce at least 20 GWh of battery storage systems per year. The first deliveries are scheduled to start at the end of 2027. According to reports, Ford is investing around 2 billion US dollars in the development of this business, including through the conversion of a site in Kentucky. Morgan Stanley believes that the segment has a long-term valuation of around 10 billion US dollars and sees relevant earnings contributions from 2028/2030.

The bullish reading is clear: Ford could get a new growth story via batteries, data centers and energy storage, of all things. Not as a direct AI chip manufacturer, but as an infrastructure supplier for the AI hunger for electricity. This is reminiscent of Tesla Energy, only with a classic car manufacturer label. For a company that has recently burned through a lot of money in the EV business, a more profitable energy business would be exactly the story that investors want to hear.

The critical classification: Ford is not suddenly Nvidia as a result. Nor does it automatically make it Tesla Energy 2.0. The market has priced in a great deal of the future here before concrete major orders, margins and cash flows are visible. So far, this is primarily an analyst story with plausible logic, but not yet a proven business model. The jump in the share price was strong, perhaps even too strong, considering that the first deliveries are not expected until the end of 2027.

The issue also remains sensitive in geopolitical terms. The CATL connection can be an advantage, but it can also become a risk in a tense US-China environment. Especially when it comes to battery technology, subsidies and critical infrastructure, regulation can quickly become a spoilsport.

Conclusion: Ford is not "the new AI stock". That would be cheap hype. But Ford could become an AI infrastructure proxy if Ford Energy actually wins major customers from the data center and industrial sectors. That's where the fantasy lies: moving away from being a pure automotive cyclist to becoming a provider of power storage in the AI age.

However, the share price move also shows how nervously the market is looking for new AI winners. A good Morgan Stanley rating is currently enough to turn Ford into an energy storage AI story in the short term. The decisive factor now will not be the story, but the proof: Orders, margins, production ramp-up. Without that, yesterday's jump in the share price remains one thing above all: a very expensive leap of faith.

Dear Community,

Having recently discussed some exciting companies from future-oriented sectors, today I would like to take a look at Contemporary Amperex Technology Co. Limited - CATL for short $3750 (-1,94 %) for short.

The Chinese group is now the world's world's largest manufacturer of batteries for electric vehicles and plays a central role in the global electrification electrification of transportation and in the expansion of energy storage solutions.

_________________________

🏢 Brief description

CATL develops and produces lithium-ion batteries for electric vehicles and energy storage systems.

The company supplies many of the world's largest car manufacturers.

Its most important customers include:

• Tesla ($TSLA (-1,32 %) )
• BMW ($BMW (+0,79 %) )
• Volkswagen ($VOW (+1,34 %) )
• Mercedes-Benz ($MBG (+1,66 %) )
• Ford ($F (+3,88 %) )
• Hyundai ($005380 )

CATL batteries are now installed in installed in over 17 million electric vehicles worldwide.

_________________________

🏢 1. company data

Foundation: 2011

Founder: Robin Zeng

Head office: Ningde, Fujian (China)

Industry: Battery technology / energy storage / electromobility

Initial public offering: 2018 on the Shenzhen Stock Exchange (Ticker: $300750
)

Employees: ≈ 147,716 worldwide

Business model

CATL develops and produces:

• Lithium-ion battery cells
• complete battery systems for electric vehicles
• stationary energy storage systems
• Battery materials and recycling solutions

The Group covers large parts of the battery value chain from raw materials to integration into vehicles.

_________________________

📈 2. finances & company value

(current company key figures)

Market capitalization: ≈ 205.5 billion €

Turnover (TTM): ≈ 366.9 billion RMB (~46.2 billion USD)

Net result: ≈ 54.2 billion RMB

EPS (earnings per share): ≈ 12.37 RMB

Quarterly profit growth (YoY): +32,9 %

Cash position: ≈ 342.7 billion RMB

💡 Explanation:

The turnover comes mainly from batteries for electric vehicleswhile energy storage solutions are increasingly becoming a second growth driver becoming a second growth driver.

_________________________

📊 3. key valuation figures

P/E ratio (trailing PE): ≈ 26,9

Forward P/E ratio: ≈ 21,2

Price-to-sales (P/S): ≈ 3,3

Enterprise Value: ≈ 180.4 billion €

💡 Explanation:

• P/E RATIO: Ratio of market capitalization to profit
• P/E RATIO (P/S): Stock market value in relation to turnover

For a strongly growing industrial technology group these valuations are considered comparatively moderate.

_________________________

💰 4. profitability & margins

Net margin: ≈ 14,77 %

Operating margin: ≈ 17,44 %

Return on equity (ROE): ≈ 22,2 %

Return on assets (ROA): ≈ 5,08 %

💡 Explanation:

• ROE: Shows how efficiently equity is used
• ROA: shows profitability in relation to total assets

Despite enormous investments, CATL remains profitable and cash flow strong.

_________________________

🛡️ 5. Balance sheet quality & financial health

Total assets: ≈ 896 billion RMB

Equity: ≈ 347 billion RMB

Cash & short-term investments: ≈ 367.5 billion RMB

CATL therefore has a very strong liquidity positionwhich enables large investments in new factories and technologies and technologies.

_________________________

🔋 6. market position & industry key figures

CATL has been the the world's largest manufacturer of EV batteries.

Global market share: ≈ 38 %

This means:

➡️ More than one in three electric car batteries worldwide comes from CATL.

The market is growing rapidly:

• electromobility
• expansion of renewable energies
• Stationary energy storage

_________________________

⚔️ 7. Overview of competitors

The battery market is highly competitive.

The most important competitors include:

• LG Energy Solution ($373220 )
• BYD ($1211 (-3,95 %) )
• Panasonic ($6752 (-2,2 %) )
• Samsung SDI ($006400 )

_________________________

💡 8. unique selling propositions (USPs)

Why is CATL considered the industry leader?

1️⃣ Technology leadership

CATL invests heavily in research and development.

Important innovations:

• Cell-to-pack technology (CTP)
• Lithium iron phosphate batteries (LFP)
• Fast-charging batteries

2️⃣ Scaling

CATL operates numerous Gigafactories worldwide.

Production capacity was already over 165 GWh and is set to increase further.

3️⃣ Global customer portfolio

The company supplies numerous international car brands and therefore has a broad diversification of demand.

4️⃣ Vertical integration

CATL invests in:

• Raw material extraction
• battery production
• recycling

In the long term, this can reduce production costs can be reduced in the long term.

_________________________

⚙️ 9. Opportunities and risks

🟢 Opportunities

The global battery market is growing strongly.

Drivers:

• Electromobility
• Energy storage for power grids
• renewable energies

CATL is also working on:

• Sodium-ion batteries
• solid state batteries

These technologies could be the next generation of energy storage storage systems.

🔴 Risks

Risks include the following:

• geopolitical tensions between China and Western markets
• Rising commodity prices (lithium, nickel)
• strong competition
• Price wars in the Chinese EV market

In the year 2024, for example, turnover fell by 9.7%, althoughalthough profits continued to rise.

_________________________

📰 Current developments

CATL is currently expanding massively internationally.

Important projects:

• Gigafactory in Hungary
• Battery production in Germany (Erfurt)
• planned battery factory in Spain together with Stellantis ($STLAM (+0,26 %)
  )

The company also raised more than Hong Kong stock exchange listing to raise over USD 4 billion in capitalto finance its global expansion.

_________________________

🧠 Conclusion

CATL is one of the most important companies in the global energy transition.

The Group combines:

• enormous production capacities
• technological innovation
• a strong market position

Should electromobility continues to grow stronglyCATL is likely to remain a key infrastructure infrastructure player in the global battery industry.

_________________________

Sources:

Investing.com: Contemporary Amperex Technology Co Ltd - Financials & Company Profile

https://www.investing.com/equities/contemporary-amperex-tech-co-ltd-company-profile

MarketScreener: Contemporary Amperex Technology Co, Limited - Company Profile

https://www.marketscreener.com/quote/stock/CONTEMPORARY-AMPEREX-TECH-46551731/company/

SNE Research: Global EV Battery Market Share

https://www.sneresearch.com/en/insight/release_view/195/page/0?utm_source=chatgpt.com

Leading managers of western car manufacturers $STLAM (+0,26 %)
$GM (+3,42 %)
$F (+3,88 %)
$RIVN (+4,12 %) among others, are sounding the alarm in the face of growing competition from China.

From the "Big Three" in the USA to European corporations $VOW (+1,34 %)
$MBG (+1,66 %)
$BMW (+0,79 %) concerns are growing that Chinese manufacturers - including BYD $1211 (-3,95 %) - could become an existential threat in the long term.

Ahead of a hearing of the US House of Representatives, the Alliance for Automotive Innovation (AAI), which represents Ford, General Motors and Stellantis, among others, warned: "China poses a clear and imminent threat to the automotive industry in the US."

The association called on Congress to maintain existing import restrictions on certain Chinese technologies, which effectively limit market access for Chinese vehicles.

Rivian CEO RJ Scaringe points above all to the structural advantages of Chinese manufacturers. "It's not that the Chinese cost structure magically works. There are really two things that you can understand very clearly," Yahoo Finance quotes him as saying. Firstly, capital costs are "close to zero in most cases", as factories are heavily subsidized. Secondly, labor costs are only a quarter to a fifth of the US level. Tariffs would currently "even out" these differences, but only temporarily.

Ford boss Jim Farley also warns of the pace of development. "We are a year behind our Chinese competitors. They are now even more present worldwide," he said. In Europe, Chinese brands recently achieved a market share of around 6.1 percent - almost twice as much as in the previous year. Farley repeatedly referred to Chinese vehicles as an "existential threat" and emphasized: "They pose a major threat to the local workforce and receive huge subsidies from the government for their exports." He added: "As a country, we have to decide what is a fair playing field."

》Companies like BYD are exemplary of this rise《

The group is expanding aggressively in Europe and other markets and is benefiting from government support and vertically integrated supply chains, particularly for batteries.

Rivian CEO RJ Scaringe points above all to the structural advantages of Chinese manufacturers. "It's not that the Chinese cost structure magically works. It's really two things that you can understand very clearly," Yahoo Finance quotes him as saying.

Firstly, capital costs are "close to zero in most cases", as factories are heavily subsidized. Secondly, labor costs are only a quarter to a fifth of the US level.

Tariffs would currently "even out" these differences, but only temporarily (as with all other tariffs, mainly to the detriment of US citizens; in Europe, the tariffs already have little to no effect and are being replaced by European factories anyway 🤫😅)

Ford boss Jim Farley also warns of the pace of development. "We are a year behind our Chinese competitors (to put it charitably 😂). They are now even more globally present," he said.

In Europe, Chinese brands recently achieved a market share of around 6.1 percent - almost double that of the previous year. Farley repeatedly referred to Chinese vehicles as an "existential threat" and emphasized: "They pose a major threat to the local workforce and receive huge subsidies from the government for their exports." He added: "As a country, we have to decide what is a fair playing field."

Companies like BYD are exemplary of this rise. The group is aggressively expanding into Europe and other markets, benefiting from government support and vertically integrated supply chains, especially for batteries.

General Motors CEO Mary Barra also criticized Canada's decision to allow up to 49,000 electric vehicles to be produced in China each year. "I can't explain why this decision was made in Canada," she said and warned: "This is becoming a very dangerous development."

Pressure is also growing in Europe. Stellantis CEO Antonio Filosa and Porsche CEO Oliver Blume are calling for CO₂ incentives to be specifically linked to locally produced vehicles. "Europe is currently witnessing the emergence of new geopolitical rivalries," they wrote. "Trade, technology and industrial capacities are being mobilized more than ever to serve national interests. The European Union must choose a path quickly." (clearly they are already building in Europe and then the single market should be taxed 🤷🏻‍♂️🫣😂👍🏻)

Industry experts expect Chinese manufacturers to further accelerate their expansion in view of the saturation of their domestic market. For Western car manufacturers, this is not just about market share - but about the strategic future of their existence.

》Conclusion《

Whining at the highest level, first they all sleep through everything, then it's all about the money and then they wake up and whine about why nobody woke them up, that's how disenchantment with politics/lobbying works 🤷🏻‍♂️

The Chinese will literally overrun us, but cheers to the management, lobbying and, above all, the politicians who made this possible in the first place 🤫👍🏻😂

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Chinese carmaker BYD $1211 (-3,95 %) is aiming to produce and source 50% of its vehicle components locally at its new Brazilian plant by the end of 2026, the company's top executive in Brazil told Reuters, amid concerns that the EV giant could undercut the local industry.

Senior Vice President Alexandre Baldy said in an interview at the plant in the state of Bahia this week that BYD is moving to a local supply chain as quickly as possible, with the goal of becoming Brazil's leading automaker in terms of sales volume by 2030.

BYD's target date for 50% local components in its Brazilian-made cars is January 1, 2027, he said. This includes both in-house production and components from local suppliers, such as tires.

"We got here very quickly - and we need to maintain this pace to reach our target," Baldy said at the Camacari plant, where electric and hybrid vehicles are produced for Brazil, BYD's largest market outside China.

Since October, BYD has been operating at the industrial complex, which occupies more than 4 million square meters and was left behind by Ford Motor Co. $F (+3,88 %) when the company ceased production in Brazil.

Camacari, an industrial center outside the state capital Salvador, renamed a nearby avenue from Henry Ford to BYD.

》FROM IMPORTS TO EXPORTS《

The increasing proportion of local components will meet regulatory requirements and allow the carmaker, which has flooded the regional market with Chinese electric vehicles in recent years, to start exporting from its Brazilian plant to neighboring countries in the Mercosur trading bloc this year, Baldy said.

While local industry and labor groups complain that BYD relies heavily on imports and temporarily low tariffs, Baldy said the automaker is forging ahead with local production lines that will eventually create 20,000 jobs in Brazil.

The Camacari plant currently assembles vehicles from imported "semi-knocked-down" (SKD) kits, benefiting from an import tax exemption that has just expired.

BYD will apply for an additional quota to extend the exemption until the middle of this year, Baldy said. However, he emphasized that the SKD approach is "a transitional arrangement", adding: "Cars need to be made with local components to be economically and financially viable."

BYD's local stamping, welding and painting facilities are nearing completion, Baldy said. This ongoing expansion is part of BYD's first phase of investment in Brazil, totaling 5.5 billion reais ($1.1 billion), which aims to increase the plant's capacity from an estimated 150,000 vehicles to 300,000 vehicles per year by the end of 2026.

》LABOR DISPUTE SETTLED《

The Camacari complex already employs around 5,000 people, including around 2,300 BYD employees and 2,500 employees from construction companies and service providers.

Adson Santana, BYD's assembly manager at the plant, said he became emotional when he returned to the place where he had previously worked for Ford before the American car company closed in 2021 and thousands of workers were laid off.

BYD's arrival in Bahia last year was marred by a labor investigation related to the construction of its plant. Late last year, prosecutors announced that BYD and its contractors had settled the case and agreed to pay 40 million reais in damages.

Baldy said the compliance agreement was only signed by the contractors and not BYD.

Ford's $F (+3,88 %) decision to expand its collaboration with CATL $3750 (-1,94 %) in the manufacture of energy storage batteries has caused dissatisfaction among members of the US Congress, according to a report in the Financial Times.

Under the license agreement between Ford and CATL, Ford will use CATL's technology in a wholly owned $3.5 billion plant in exchange for substantial federal manufacturing tax credits.

John Moolenaar, Chairman of the U.S. House of Representatives Select Committee on China, sent a letter to Ford CEO Jim Farley requesting an explanation of the nature of the close relationship between Ford and CATL. Moolenaar also asked for clarification on the original terms of the license agreement and whether the agreement gives CATL rights to influence production, retain technological control or receive royalties based on production volume.

According to a new report in the Wall Street Journal, Ford is in $F (+3,88 %) is in negotiations with BYD $1211 (-3,95 %) to purchase batteries for some of its hybrid models.

Sources familiar with the matter said talks on the exact terms of the battery deal are still ongoing, but some indicated that Ford would use the batteries for hybrid vehicles sold outside the U.S.

Under the agreement, Ford would import BYD batteries to plants outside the U.S., possibly to Germany, Spain, Thailand, Turkey or other large overseas plants. However, according to the sources, there is still a possibility that the deal will not materialize.

A Ford spokesperson said, "We are talking to many companies about many things," but did not provide further details. BYD declined to comment.

The report follows Ford's announcement last month that it would discontinue the all-electric F-150 Lightning as part of a broader transition of its Ford+ plan.

Instead of large electric vehicles, Ford is focusing more on smaller, more affordable models with its low-cost universal EV platform. In the meantime, the company will fill the gap with new hybrid vehicles and extended-range electric vehicles (EREVs).

Ford will replace the electric pickup with an EREV version that uses both battery power and a gasoline engine that acts as a generator to keep the battery charged.

The company announced that it would incur losses of 19.5 billion US dollars as a result of the restructuring, about half of which was due to the discontinuation of the Lightning model.

Ford is nearing completion of its BlueOval Battery Park in Michigan, where it will license technology from Chinese company CATL for upcoming vehicles based on the UEV platform. The battery factory is scheduled to start production this year.

The first vehicle based on the UEV platform will be a mid-size electric pickup, which Ford says will start at around 30,000 US dollars.

At the Detroit Auto Show, which opened to the public on Thursday, Ford CEO Jim Farley said that following the success of the F-150 Hybrid, he wants to expand the company's hybrid and EREV lineup.

Electrek's opinion

It's no great surprise that Ford is turning to China's leading battery manufacturers. The company has already licensed CATL's technology for use in its Michigan battery plant, so a deal with BYD is a distinct possibility.

For Ford, this would help ensure a stable supply of batteries (outside the US) as the company plans to launch new hybrid and EREV models over the next few years.

Ford and BYD are no strangers to each other either. In 2020, Ford's joint venture in China, Changan Ford, began using BYD batteries in vehicles sold there. Since then, BYD has reportedly contacted Ford about supplying batteries for other markets.

While the US is pulling back, China is pushing new EV technologies, including next-generation batteries, advanced driver assistance systems (ADAS) and other related technologies.

China already dominates the global EV battery market. According to SNE Research, CATL and BYD alone accounted for over 50% of global sales last year.

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