In the new energy competition, power batteries represent a critical sector. Leveraging its industrial chain and manufacturing advantages, China has increasingly secured a pivotal position in the global power battery market. However, two recent developments have posed challenges to the overseas expansion of Chinese power battery manufacturers.

First, South Korea's LG Energy Solution secured a $4.3 billion order for lithium iron phosphate (LFP) batteries，accelerating its push into China’s traditionally dominant domain and directly threatening related domestic industries. Meanwhile, Chinese battery manufacturer Sunwodalost a patent lawsuit against LG Energy Solution and Japan’s Panasonic Energy, exposing gaps in Chinese companies' intellectual property (IP) strategies and risk mitigation capabilities.

As noted by Dong Yang, Chairman of the China Automotive Power Battery Industry Innovation Alliance, China’s power battery industry faces dual challenges in its global expansion: market encroachment and IP barriers. As the industry transitions from "scale-driven growth" to innovation-driven global expansion，how Chinese companies can respond to competition, address vulnerabilities, and establish a global presence for indigenous innovation is not only crucial for the power battery sector but also emblematic of the broader imperative for China’s manufacturing industry to achieve high-quality globalization.

The international market is the next major battlefield.

The investment landscape of China's electric vehicle (EV) industry chain is undergoing a profound transformation. According to a report by the consulting firm Rhodium Group, in 2024, Chinese enterprises in the EV industry chain made overseas investments of approximately 16 billion, surpassing domestic investments of 15 billion for the first time. Among them, the power battery sector became the core force of overseas investment, accounting for 74%.

In recent years, leading domestic power battery enterprises have accelerated their overseas expansion plans. As an industry leader, CATL began its overseas journey as early as 2019, establishing its first factory in Germany. Currently, it has planned production capacity in Germany, Hungary, Thailand, Indonesia, and other regions. Among them, the Thuringia plant in Germany started production in 2022, with an initial capacity of 14 GWh. It not only supplies automakers such as BMW but also integrates energy storage production lines. The Hungarian factory is being constructed in three phases, with a planned capacity of 100 GWh, and will become a core base serving European automakers. In addition, CATL has formed a joint venture with Thailand’s Arun Plus and invested nearly 6 billion in Indonesia to build an end-to-end integrated industrial chain project.

Sunwoda has also actively expanded globally, establishing overseas factories in Hungary, Morocco, Vietnam, and Thailand. The Hungarian base started construction in October 2024 and is expected to commence production in the second half of 2026. It plans to have production lines for power batteries and energy storage cells, mainly targeting the European market. The Thai base has an investment of over 1.4 billion and is scheduled to commence production in 2025, focusing on Southeast Asian and neighboring markets.

EVE Energy has prioritized Southeast Asia and Europe. The first phase of its factory in Malaysia has already started production, and the second phase is progressing smoothly. The total investment exceeds ¥3 billion, with a planned capacity of 20 GWh. In Thailand, it plans to form a joint venture with EA Group to build a battery production base. In May 2024, it also announced the construction of a battery factory in Hungary to supply cylindrical batteries to BMW Group.

Compared with established global leaders such as LG Energy Solution and Panasonic Energy, Chinese power battery companies have witnessed an overall upward trend in their global market share. Data shows that in the first half of 2025, among the top ten global power battery manufacturers by installed capacity, Chinese companies occupied six positions: CATL, BYD, CALB, Gotion High-tech, EVE Energy, and SVOLT. The total installed capacity of these six companies was 346.7 GWh, accounting for 68.7% of the global market share. Among them, CATL and BYD together accounted for 55.7%. It is worth noting that although LG Energy Solution ranked third, its market share dropped from 12.3% in the same period of 2024 to 9.4%, while Panasonic Energy’s market share was continuously squeezed, with both its ranking and share declining.

In terms of market competitiveness, domestic enterprises benefit from complete industrial chains and cost control advantages, resulting in outstanding product cost-effectiveness. They possess strong competitiveness in the mid-to-low-end market and continue to invest in technological R&D. For instance, CATL has made breakthroughs in technologies such as high-nickel ternary and lithium iron phosphate (LFP). However, international players retain certain advantages in high-end technologies, brand recognition, and early customer resource accumulation. For example, LG Energy Solution excels in cylindrical battery technology, and Panasonic Energy has long served premium clients like Tesla, earning a strong reputation for battery consistency and safety.

“Policy + Patent” Bottlenecks

From domestic capacity optimization to global market expansion, the vigorous "going global" of Chinese power-battery companies is no longer an optional path—it has become a necessary choice to align with industrial upgrading and break through development bottlenecks.

Yang Guanghui, a senior figure in the European power-battery industry, notes that the global sector is now in a "hundred flowers blooming" phase: Korean, Japanese and Chinese players each have their own focus. Chinese leaders have established themselves through economies of scale, built on experience accumulated in the vast domestic market and a complete industrial-chain ecosystem—helping CATL stay at the top of global market-share rankings.

However, as the domestic market saturates and competition intensifies, overseas markets have become a "blue ocean" for Chinese firms seeking to break through growth bottlenecks. Europe and Southeast Asia, in particular, show large demand gaps, spurring overseas investment by Chinese new-energy-vehicle and power-battery supply chains—sometimes exceeding domestic levels. This is both an active corporate choice and an inevitable shift from "domestic leadership" to "global layout," and from scale advantage to a global competitive edge.

Yang goes on to warn that Chinese power-battery makers now face two core hurdles in their global expansion: policy barriers and intellectual-property (IP) risks.

On the policy front, U.S. restrictions are the toughest. Although Washington promotes its own power-battery industry through incentives, the Inflation Reduction Act (IRA)—signed into law by the Biden administration—explicitly targets the Chinese supply chain: it narrows subsidy eligibility and bars packs/components sourced from "foreign entities of concern," including China. Even CATL and EVE Energy's "technology-export" model—in which foreign partners (e.g., Ford, Cummins) build the plants while Chinese firms supply technology and operations—is excluded from the subsidy.

Europe, while politically more stable, is increasingly aligning with U.S. policy and remains cautious about Chinese investment. Consequently, leading Chinese players can only expand in Europe step by step, with little room for large-scale moves. Against this backdrop, companies are pivoting to Southeast Asia: CATL, Sunwoda and others are ramping up local capacity, forming a policy-driven globalization path.

IP challenges are equally severe. International markets apply rigorous patent scrutiny. Sunwoda's defeat in its patent dispute with LG Energy Solution highlights Chinese firms' weak overseas patent portfolios and legal-risk preparedness. China's relatively lenient patent environment means some technologies may involve imitation or close resemblance, and many companies fail to file for international patents in time; once they enter foreign markets, they become easy targets for litigation. In overseas courts, Chinese companies—unfamiliar with local legal systems—often find themselves on the back foot.

Of these two hurdles, policy restrictions are largely beyond companies' control; they can only adapt passively. IP issues, however, require proactive fixes: building robust patent portfolios and sharpening legal defenses. Together, these challenges test the resilience and global competitiveness of China's power-battery industry.

Keep Technological Innovation in Our Own Hands  

The international arena is set to become the next main battlefield for China’s power-battery industry. Confronted with policy barriers and intellectual-property headwinds, Chinese manufacturers that want to export innovation must mobilize support at the national level, craft smarter corporate strategies, and push for breakthrough technologies—coordinating all three dimensions to carve out a path that fits their own realities.  

Yang Guanghui argues that securing state-level backing is the first insurance policy for going global. Because every country writes its own rules, individual firms are ill-equipped to fight discriminatory clauses. Beijing needs to take the lead, using platforms such as the WTO to challenge unfair treatment and to invoke international trade rules that level the playing field. Only when the state “has the back” of its industry will Chinese power-battery companies stand tall overseas and feel less drag from policy walls.  

At company level, CEOs must be rational about “clubbing together” and avoid antitrust traps. Although a united front sounds appealing, top-tier rivals such as CATL and BYD are still competitors; forced collusion could be painted as cartel behavior and give Washington or Brussels an excuse for anti-dumping or anti-monopoly action—more loss than gain. A practical route is to hunt for policy windows. Not every overseas market is tightening the screws; some are openly welcoming. Southeast Asia and Belt-and-Road countries that actively court new-energy industries combine generous incentives with immature markets, leaving plenty of headroom. By concentrating on these friendlier jurisdictions first, firms can accumulate overseas operating experience and prepare for larger beachheads later.  

But the core confidence to break a blockade is deep, home-grown technology. The real reason Washington keeps Chinese power-battery firms at arm’s length is fear of their technical muscle. The rise of LFP chemistry is Exhibit A: once dismissed by European and U.S. OEMs, it is now being copied by them—proof that Chinese breakthroughs can flip market perceptions.  

Looking forward, companies must double down on next-generation advances—especially solid-state batteries. Japan and Korea are already racing in this lane; Chinese players have to accelerate R&D and keep the key IP in-house. Only by reaching technical heights that others cannot easily replicate can they create differentiated, defensible advantages, outflank policy walls, and move beyond “product export” to genuine “technology export” and “innovation export,” securing a firm foothold in the global power-battery market.

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