Overseas Expansion in the Lithium Battery Supply Chain Accelerates as Capacity Release and Profitability Come into View

Recently, lithium battery material companies such as Zhongke Electric, Tinci Materials, and Ronbay Technology have successively announced major overseas investment plans, further fueling the momentum of the supply chain’s international expansion.

Amid intensifying domestic competition and rising localization demands in overseas markets, "going global" has become a necessary path for companies in the lithium battery industry chain. With leading manufacturers such as CATL and EVE Energy accelerating the release of overseas capacity, the industry’s expansion is moving from planning into substantial implementation, with profitability now within reach.

However, the road to globalization comes with both opportunities and challenges. Many industry professionals stress that overseas investment should be backed by firm orders and directed toward locations with the lowest comprehensive costs. Moreover, localized operations and marketing strategies tailored to the cultural and market environment are essential.

Although the lithium battery industry continues to bottom out in 2025, enthusiasm for overseas expansion remains high, with frequent updates on new overseas plant investments. In June 2025, Zhongke Electric announced an investment of no more than RMB 8 billion to build a vertically integrated plant in Oman with an annual capacity of 200,000 tons of lithium-ion battery anode materials. The project will be constructed in two phases, each with 100,000 tons of capacity.

That same month, Tinci Materials unveiled an integrated project in Morocco for producing 150,000 tons of electrolyte products and key raw materials annually, with a total investment of MAD 2.576 billion (approximately USD 280 million). Earlier, in April 2025, Ronbay Technology and Capchem also released their overseas expansion plans. Ronbay Technology will invest up to RMB 1.705 billion in a 25,000-ton cathode materials plant in Poland, while Capchem plans to invest no more than USD 26 million in a new facility for lithium-ion battery electrolyte and other electronic chemicals in Kedah, Malaysia.

According to Mo Ke, chief analyst at True Lithium Research, “Previously, some companies took a wait-and-see approach, but now, from both policy and market perspectives, going global is a must.” He added that substantive overseas expansion will increasingly follow.

Data from Cui Dongshu, Secretary-General of the China Passenger Car Association, indicates that as of 2024, the penetration rate of new energy vehicles in China reached 38.9%, significantly higher than in Germany (18.2%), France (21.5%), the United States (9.6%), South Korea (9.5%), and Japan (6.7%). This highlights substantial growth potential in overseas markets.

In addition, policies such as the U.S. Inflation Reduction Act, the EU Battery and Waste Battery Regulation, and the Critical Raw Materials Act—combined with the impact of tariffs—have increased the pressure on overseas automakers to localize their supply chains, prompting lithium battery enterprises to accelerate overseas capacity deployment.

According to Wang Yin, Investor Relations Manager at Longpan Technology, “Currently, the overseas market is still in the blue ocean stage. Demand is strong, but localized capacity remains insufficient. With orders and capacity in place, overseas investments hold promising prospects.”

Profit margins in overseas markets further demonstrate the opportunity. In 2024, CATL’s overseas gross profit margin reached 29.45%, 7.2 percentage points higher than its domestic margin. EVE Energy and Gotion High-Tech posted overseas margins of 21.23% and 22.28%, exceeding their domestic figures by 5.04 and 6.21 percentage points, respectively.

Zhang Jinhui, a senior researcher at Xinluo Information, noted that Chinese lithium battery investments overseas are mainly concentrated in Europe, Southeast Asia, and Morocco. Europe hosts concentrated customer bases, while Southeast Asia and Morocco offer favorable trade policies and local resources, such as nickel and phosphate.

Securities Times has observed that some of the earliest movers in overseas investment are now seeing their capacity come online, supported by orders and showing signs of profitability—offering a preview of performance benefits to come.

CATL’s first overseas plant in Thuringia, Germany, began cell production in 2022 and ramped up steadily. By 2024, it received dual certifications from Volkswagen Group’s module and cell testing labs and has already achieved profitability.

Building on its German operations, CATL is advancing its Hungarian plant. Phase one’s module lines are expected to launch this year, with cell production starting in the second half. Phase two has also received approvals and commenced construction. Meanwhile, CATL has announced plans to jointly build a plant in Spain with Stellantis.

According to CATL, the Hungarian facility integrates operational improvements based on experience from Germany and benefits from larger scale, which should lower costs. With strong client demand and confirmed orders, the Hungarian site is expected to outperform in profitability.

Mo Ke commented, “As the leading enterprise, CATL’s success in Germany sends a strong signal to the industry and will encourage more supporting companies to expand abroad.”
Other battery companies are also reporting progress. EVE Energy launched production at its first overseas battery plant in Malaysia in February 2025. Envision AESC’s gigafactory in Douai, France, began operations in June 2025.

Among materials manufacturers, early movers are also entering a harvest phase. Longpan Technology, the first cathode company to establish lithium iron phosphate capacity overseas, began production at its 30,000-ton Phase I project in Indonesia in early 2025 and has shipped products to overseas clients.

“Phase I in Indonesia is now fully operating and fully sold,” said Wang Yin. The company began constructing a second 90,000-ton phase in April 2025, aiming to complete it by year-end and reach full capacity in Q1 2026. Since 2024, Longpan Technology has signed long-term contracts with LGES, Blue Oval, and EVE Energy. The LGES deal is valued at nearly RMB 10 billion, and the EVE Energy contract exceeds RMB 5 billion.

Ronbay Technology achieved full capacity in Q4 2024 at its Korean plant’s first phase (20,000 tons of high-nickel ternary materials) and recorded its first monthly profit. Capchem’s overseas investment in Poland, five years in the making, has now achieved stable operations and single-quarter profitability. Monthly output is around 2,000 tons, and the company expects a significant increase in Polish exports in 2025.

Mo Ke emphasized that the gradual capacity release from leading companies will serve as a demonstration for others, improve local supply chains, reduce future expansion costs, and create a virtuous cycle of “order acquisition – profit release – capacity expansion.”

Although positive signals are emerging, most interviewees believe that the overall pace of overseas expansion remains slow. Zhang Jinhui pointed out that compared with domestic investments, overseas projects have higher costs, longer payback periods, and increased risk. As the industry has faced a prolonged downturn, many companies are under financial strain. Expanding overseas financing channels has become essential.

To support their overseas operations, CATL, EVE Energy, Lead Intelligent, and CNGR Advanced Material have all announced plans to list in Hong Kong. CATL was successfully listed on the Hong Kong Stock Exchange Main Board on May 20, 2025, raising more than HKD 40 billion after exercising the over-allotment option. Ninety percent of the proceeds will go toward Phase I and II of the Hungarian plant.

Zhang added that companies should conduct thorough analysis of target markets, including the downstream potential of automakers or battery factories, and base their investments on order visibility. Most projects with completed capacity were supported by confirmed contracts and stable clients.

From a cost perspective, the journey from planning to mass production requires navigating various local challenges—environmental permits, labor laws, and workforce development. These elevate both construction and operational expenses, and profitability typically comes only after a long period.

Enjie Co. noted that civil construction in overseas markets takes longer than in China, and production ramp-up cycles are extended. Overseas client validation takes 1–2 years, while domestic validation typically takes less than one year. Wang Yin emphasized that “post-construction operations are more difficult. Whether companies can align with local policy, market, and cultural conditions will directly affect output efficiency and product quality.”

Mo Ke added, “Many factories abroad face shortages of technical talent. Combined with stringent labor laws, recruitment and training consume significant resources.” Wang said cultural integration is critical. Longpan Technology promotes foreign language learning and has partnered with technical schools in Indonesia to develop a local talent pipeline. Most skilled workers at its Indonesian facility are local.

Finally, asset-light “technology export” models are gaining traction. CATL launched its LRS model to offer technical authorization and plant construction services for overseas carmakers. The model has received strong interest. EVE Energy has also introduced a global CLS cooperation model that provides joint R&D, licensing, and support services to complement its core battery business.