CATL LFP feedstock supply strategy accelerates amid global EV demand

CATL

The CATL LFP feedstock supply strategy is accelerating as the battery giant locks in long-term cathode materials. By prepaying key partner Shenghua, the CATL LFP feedstock supply strategy aims to stabilise costs and secure volumes. As EV demand rises, the CATL LFP feedstock supply strategy underpins CATL’s dominance in LFP batteries and its next growth phase.

Prepayments deepen CATL LFP feedstock supply chain integration

CATL has agreed significant prepayments to secure LFP from Jiangxi Shenghua, part-owned by Fulin Precision. It will pay 500mn yuan by September and a further Yn1bn in November to support Shenghua’s capacity expansion. However, supply volumes and pricing remain undisclosed, reflecting competitive sensitivity.

The CATL LFP feedstock supply strategy comes on top of earlier support for Shenghua’s new plants. CATL is backing a 160,000 t/yr LFP facility in Yichun and a 200,000 t/yr LFP plant in Sichuan. As a result, Shenghua’s LFP output already jumped from 42,159t in 2023 to 128,240t in 2024, with sales closely tracking that growth.

Meanwhile, CATL signed a Yn6bn deal with major LFP producer Jiangsu Lopal in mid-September. That contract secures 157,500t of LFP for CATL’s overseas factories from 2025 to 2031. Together, these moves show how the CATL LFP feedstock supply strategy combines prepayments, project finance and multi-year offtake to lock in LFP at scale.

CATL LFP feedstock supply supports EV battery expansion and sodium-ion push

CATL is coupling its LFP security with downstream partnerships and technology upgrades. The firm signed a cooperation agreement with EV maker Li-Auto on safety and ultra-fast charging. Li-Auto has already produced more than 1mn vehicles using CATL battery technology, cementing a deep platform relationship.

Battery installations underline the strength of CATL’s position. The company installed 190.9GWh of power batteries in January-June, up 38pc year on year. Therefore, the CATL LFP feedstock supply strategy is not just about risk management. It is also about sustaining leadership as competitors chase similar EV opportunities.

At the same time, CATL is preparing its next technology step with the Naxin sodium-ion battery. Mass shipments are targeted for 2027, with an energy density of 175Wh/kg. The company says this performance can cover over 40pc of domestic passenger vehicle demand. Sodium-ion will not replace LFP, but combined with a robust CATL LFP feedstock supply base, it gives CATL a wider toolkit across price and performance segments.

The Metalnomist Commentary

CATL is turning LFP procurement into a strategic weapon, using prepayments and capex support to secure future capacity. Its parallel push into sodium-ion suggests a portfolio approach to cathode chemistry rather than a single-bet strategy. For rivals and automakers alike, CATL’s LFP deals with Shenghua and Lopal are a clear signal that upstream security is now central to battery competitiveness.