"Investor Network" Jordan.
Recently, there has been news circulating in the market about Contemporary Amperex Technology (CATL) implementing the "896 work system" and calling on employees to "fight hard for 100 days", which immediately caused waves on social media. In response to this, CATL's Chairman and CEO Zeng Yuqun stated at the Summer Davos Forum on June 25th that "fighting for 100 days is to call on everyone to practice their basic skills well, and we do not force anyone." On the product structure, the operating income of 10-30 billion yuan products are 401/1288/60 million yuan respectively.
Looking deeper, CATL's initiative this time may be closely related to the intensified market competition it currently faces.
In the power battery industry, although CATL has always maintained its leading position, in recent years, with the vigorous development of the new energy vehicle market, the competitive situation has become increasingly fierce. Some auto manufacturers have begun to produce their own batteries to reduce their dependence on external suppliers. At the same time, other domestic and foreign power battery companies are also actively seeking to expand their market share. This undoubtedly has brought unprecedented pressure to CATL.
Last year, the number of employees decreased by nearly 3,000.
CATL's proposal of the "100-day battle" may be aimed at enhancing employees' basic skills to improve the company's overall competitiveness. Although CATL's original intention is good, the concept of the "896 work system" still aroused widespread concern in society. On social media, many netizens expressed concerns about this work system and believed that it may have adverse effects on employees' physical and mental health.
Nowadays in China, ESG (Environmental, Social, and Governance) has become a hot topic, and labor management is one of the assessment indicators. From the perspective of ESG, employees are valuable assets that companies cannot do without, and their efficiency and vitality are crucial for the sustainable development of enterprises. The issues that employees are concerned about, such as equal employment opportunities, salary and performance, occupational health and safety, welfare and rights protection, working environment, and promotion channels, have become aspects that companies cannot ignore.
At the same time, the employee turnover rate is usually used as an important indicator to measure the level of labor management in enterprises. High turnover rates will not only affect the stable operation of enterprises, but also increase their recruitment and training costs.
According to data, the total number of CATL's employees in 2023 is 116,100, a decrease of 2,859 compared to the number of employees in 2022. This change is relatively rare in CATL's development history. Wind data shows that since 2019, the number of employees has undergone significant growth, from 26,800 to 118,900 in 2022. Therefore, the decrease in the number of employees in 2023 is particularly noteworthy.
Further observations found that CATL's employee reduction in 2023 was mainly concentrated in production personnel, from 89,100 in 2022 to 81,800. This change may be an adjustment that the company has to make in response to market changes. In fact, CATL's capacity utilization rate also showed a significant decline in 2023 compared to previous years. Against the backdrop of intensified competition in the new energy vehicle market, CATL is under considerable pressure.
Capacity utilization rate decreased.
CATL's performance in 2023 reached a new level, with revenue reaching 400.9 billion yuan, an increase of 22.01% year-on-year; net income exceeded 44.1 billion yuan, a year-on-year increase of 43.58%, and this achievement is CATL's first time that its annual net profit has exceeded 40 billion yuan. The core business focuses on power battery systems, with revenue of 285.3 billion yuan, a year-on-year increase of 20.57%, accounting for 71.15% of the total revenue.
However, from the perspective of production and sales, CATL's power battery system is not as prosperous as it used to be. According to financial report data, the capacity utilization rate in 2023 was 70.47%, a decrease of 12.93 percentage points compared to 83.4% in 2022.
From the perspective of the growth rate of sales and production volumes, although these two indicators still showed a growth trend in 2023, with an increase of 34.95% and 19.69% respectively, the growth rate has significantly slowed down compared to previous years. For example, the growth rates in 2022 were 116.6% and 100.2% respectively, while in 2021 they were as high as 184.82% and 213.87% respectively.
CATL has an absolute leading position in the power battery field. According to data from South Korean research institution SNE Research, in 2023, its power battery usage in China reached 171.9 GWh, a year-on-year increase of 28.7%, and it has continuously ranked first with a market share of 44.5% for seven consecutive years. According to its financial report, the company's global market share of power batteries and energy storage batteries has also maintained its first place for many years.
Power battery is the key power source for new energy vehicles, which is also a distinctive component different from other traditional fuel vehicles. However, the high cost of power batteries has also brought considerable pressure to car companies. At the 2022 World Power Battery Conference, Guangzhou Automobile Group Chairman Zeng Qinghong joked that power battery costs have accounted for 40% to 50%, or even 60%, of the cost of new energy vehicles, seemingly working for Contemporary Amperex Technology.
In the past, apart from BYD and Great Wall, almost all other car brands chose to purchase batteries externally. However, with the continuous increase in battery costs, more and more car companies are starting to develop power batteries independently.
Starting from December 2023, new carmakers such as Aiways, Giga and NIO have successively released their own battery research and development. At the same time, joint ventures and foreign companies are also increasing their investment in this field. Automakers such as BMW, Volkswagen, Ford, Toyota, and Honda have all launched self-developed battery plans, and some automakers have even targeted more advanced solid-state battery technology in an attempt to "win by surprise" and reduce their dependence on Contemporary Amperex Technology.
In such a market environment, BYD, which has already made some progress in the field of power batteries, has also developed rapidly in recent years. According to the global power battery statistics released by SNE Research, from January to April 2024, BYD ranked second in installed global power batteries, second only to Contemporary Amperex Technology.
Faced with increasingly fierce market competition and future challenges, Contemporary Amperex Technology is advancing its technology research and development. When receiving visits from institutions such as Goldman Sachs, Temasek, and Ray Yuan Fund in June of this year, the company stated that if technology and manufacturing maturity are used as an evaluation system and scored from 1 to 9, the company’s all-solid-state battery research and development project is currently at a level 4, and plans to achieve a level of 7-8 by 2027, with the potential to realize small-scale production.
At the same time, Contemporary Amperex Technology is also strengthening its industrial cooperation, such as the Beijing Times Battery Base project that started construction in June of this year, which marks the establishment of its supply chain cooperation with BAIC, Xiaomi Motors, Li Auto, and other companies. It will promote the clustering effect of Beijing's new energy vehicle industry. This project also reflects the company's commitment to eco-friendly concept, using "lighthouse + zero carbon factory" standard design, and is scheduled to start production in 2026. (Produced by Thinking Finance and Economics) ■