CATL(SZ:300750) Xin Lang Cai Jing·2025-10-11 20:28Core Insights - The article discusses a group of top venture capitalists (VCs) from the West who visited China to assess the competitive landscape in clean technology and manufacturing, ultimately leading to a pessimistic outlook on investment opportunities in certain sectors [5][20]. Group 1: Observations from the Visit - The VCs experienced a "cognitive tsunami" as they witnessed the scale and speed of Chinese manufacturing, particularly at CATL, which dominates the global battery market with nearly 40% share [8][10]. - At CATL, the VCs were struck by the level of automation and efficiency, with 12 production lines operating with minimal human intervention, showcasing a system that is difficult to replicate [9][11]. - The visit to Shanghai's Marvel-Tech highlighted China's ability to rapidly innovate and adapt, with a robust supply chain that allows for quick prototyping and low costs, contrasting sharply with the longer timelines and higher costs in Europe [15][16]. Group 2: Industry Implications - The VCs concluded that the battery manufacturing sector and its supply chain are no longer viable for Western investment due to China's cost advantages, with battery costs in China at $60 per kWh compared to $120 in the West [21]. - The solar and wind energy sectors are similarly dominated by Chinese firms, with companies like GCL-Poly leading in next-generation technologies like perovskite solar cells, while Western firms struggle to maintain profitability [23]. - The production of key equipment for green hydrogen, such as electrolyzers, is also being outpaced by Chinese manufacturers, who benefit from significant subsidies and competitive pricing [26]. Group 3: Strategic Shifts - The VCs recognized a need to shift focus from direct competition in manufacturing to areas where the West holds advantages, such as software and innovative business models [29][31]. - A new paradigm is emerging, encapsulated in the phrase "Western Software, Eastern Hardware," suggesting a collaborative approach where Western capital and innovation can leverage Chinese manufacturing capabilities [27][29]. - This shift is prompting some VCs to pause investments in European battery startups and instead create funds focused on Sino-European technological cooperation [31]. Group 4: Future Considerations - The insights gained from the trip emphasize the importance of recognizing and adapting to the systemic efficiencies of China's industrial model, which prioritizes scale and cost over immediate profitability [26][35]. - The article concludes with a call for humility and collaboration in the face of a rapidly evolving global economic landscape, where traditional competitive strategies may no longer suffice [35].