CATL(SZ:300750) Xin Hua Wang·2025-08-12 05:49Core Viewpoint - The EU's new battery regulation, effective from August 17, 2023, will significantly impact Chinese battery manufacturers exporting to Europe, requiring compliance with a "battery passport" that documents various aspects of battery production and supply chain [1][2]. Group 1: Challenges Faced by Chinese Battery Manufacturers - The new regulation introduces three main challenges for Chinese battery companies: carbon footprint declaration, recycling and reuse of battery materials, and stringent information disclosure requirements [4][5]. - From July 2024, most batteries exported to Europe must provide a carbon footprint declaration, which poses difficulties due to the lack of established digital tools and unified standards in China [4]. - The regulation mandates a certain percentage of recycled materials in battery production, but China currently lacks a mechanism to verify the use of recycled materials [4][5]. Group 2: Market Dynamics and Responses - China holds 77% of the global battery production capacity, with its market share in Europe increasing from 14.9% in 2020 to 34% in 2023 [3]. - In response to the new regulation, the "Chinese version of the battery passport" project has been initiated to align with international standards and facilitate trade with the EU [2][6]. - The battery passport is a key element for successful exports, as it is recognized by multiple countries and aims to enhance product sustainability [6][7]. Group 3: Industry Adaptation and Future Outlook - Several Chinese battery companies, including CATL and others, are actively pursuing zero-carbon transformation strategies and exploring solutions for carbon footprint management and recycling [9]. - The EU plans to develop a battery information exchange platform to track the lifecycle of batteries, which will require companies to share sensitive performance data [10]. - China's experience in battery lifecycle management and data transparency may provide valuable insights for Europe as it implements its new regulations [12].