Xi Jinping Has Mixed Feelings About Tesla's Chinese Battery Supplier's Whopping Market Dominance

Chinese President Xi Jinping reportedly told Tesla Inc. TSLA battery supplier Contemporary Amperex Technology Co. Limited, or CATL, that he had mixed feeling about its status as the world’s largest battery maker.

What Happened: Xi said he was “both happy and worried” about CATL’s leading position, reported Reuters. Xi was said to be talking at a meeting with industry and commerce representatives.

Xi said he is glad for CATL’s leading position, and also concerned for the risks involved, said the report, citing Xinhua news agency.

“Emerging industries must do a good job in planning, figuring out how big the market is and where the risks are. They should avoid marching ahead alone in an invincible fashion, only to be caught out by others and fail in the end,” Reuters quoted Xi as saying.

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CATL is the world’s largest battery supplier dominating over 35% of the global battery market. The battery is the single most expensive component in an EV. CATL supplies batteries to several EV makers including Tesla and Nio Inc. NIO.

Earlier in February, Ford Motor Co. F made a $3.5 billion investment to build the first lithium iron phosphate battery plant in the U.S. with the leading battery maker.

However, different EV companies are now attempting to manufacture their own batteries in a bid to cut costs. While Tesla is seeking to manufacture its own batteries at its Gigafactory in Nevada, Chinese EV maker Nio reportedly plans to build a plant in China with a yearly capacity of 40 gigawatt hours of cylindrical batteries.

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