Battery Show Asia
Takeaways from Hong Kong’s inaugural Showcase
I attended the inaugural Battery Show Asia in Hong Kong, and gathered notes with my friend and fellow attendee, Melissa Zhang, Principal at Azimuth Capital Management. We last collaborated on “Preventing Fraud in the Battery World” (2020) so it was fun to write another post together.
Here are our key takeaways…
1. CATL was the big fish at the show
“The story of CATL is the story of collaboration between nations and individuals,” said Jiadong Gong, VP and CTO of CATL HK, in his keynote address at the Battery Show Asia last week. He opened with big numbers: 17M EVs in 66 countries; EV battery consumption volume soared from 23 GWh in 2018 to 339 GWh in 2024; 2000+ ESS projects around the world.
We were wowed by CATL’s “Extreme Manufacturing”. At their core, they have 2 decades of traceable big data (>1 trillion data points) to optimize every angle of production for cell performance, quality, energy utilization, and carbon emissions. In production at their lighthouse flagship factories, this manifests as 7000+ control points per line for PPB defect detection and real-time energy optimization, cutting production costs by 42% and carbon emissions by 57%.
Moving upstream from cell manufacturing, Jiadong talked about CATL’s new Hong Kong R&D hub for “AI for Science and Sustainability” and the use of Gen AI, diffusion models, large language frameworks, and high-performance computing systems (powered by green energy and specialized AI chips) to accelerate the discovery and simulation of next-generation battery materials.
CATL is building a fully digital, vertically integrated monster of a battery ecosystem. For the rest of the industry, it’s a clear warning that without serious investment in digital infrastructure, you will fall behind (or already have).
2. Battery swapping, it’s about to get big in Asia
While battery swapping has been a quiet conversation in the Western EV world, they had a whole track dedicated to battery swapping.
I listened to Gary Yang from Dragon Rise New Energy, a Hong Kong company setting up battery swapping stations for CATL. In dense urban environments like Hong Kong where land is scarce, grid capacity is constrained, and infrastructure development is heavily regulated, battery swapping makes sense.
Hong Kong, for example, only has 11,188 EV chargers (only 18% are >20kW). In 2025, there are roughly 119,000 EVs in Hong Kong, a 10:1 ratio of EVs to chargers. Thailand faces a similar mismatch, roughly 220,000 EVs in Thailand but only 3429 public chargers (60:1).
Dragon Rise and CATL are rolling out the modular “Choco” battery swap stations. They can swap a battery in 100 seconds and they’re rolling these out. We spoke with CATL/Dragon Rise’s HK sales manager who told us that the Choco program will roll out 1000 chargers next year, including 3 in Hong Kong, the rest primarily in mainland China. Here’s a nice article from the FT highlighting a few companies in the space.
3. JVs in the USA
Michael Liu, Director of Research and Insights at the Volta Foundation, offered a strategic perspective on how Asian battery firms (particularly China) can effectively enter the US market. Margins on US-produced batteries can reach up to $15/kWh compared to just $6/kWh in China.
However, the path forward is complex. Data from CRU shows that joint ventures (working with someone who knows what they’re doing) ramp production much more efficiently, a key consideration as US policy becomes more restrictive.
The “foreign entity of concern” (FEOC) clauses in the IRA’s 45X tax credit provisions are the main factors to navigate. By 2030, no more than 15% of a cell’s value can originate from FEOC entities (foreign/influenced/controlled entities) to remain eligible for federal subsidies. Note: this does not extend to equipment.
There are still strategies for Chinese manufacturers to access the 45X tax credits. These include joint ventures, licensing agreements, and subsidiary structures, each with different levels of risk and scrutiny.
According to Michael, JVs offer the most practical route. Under the new rules, the JV must limit foreign entity of concern (FEOC) ownership to below 40%, and that 40% must be from 2 foreign entities. This allows companies to preserve access to key US tax incentives while still leveraging manufacturing and supply chain strengths from abroad.
Location also matters. For Asian firms, aligning with a US partner in red states where labor costs are lower, union activity is reduced, and policy favors industrial investment can offer a strategic edge.
4. EV Market Snapshot: Global, China, and Southeast Asia
Zoe Zhang, Research Analyst at Rho Motion, provided a snapshot of the state of EVs. Global EV sales are up 28% year-to-date (May 2025), but bifurcated by region: China and Europe are up 33% and 27% respectively, the US up 3%. Indeed, US EV rebate uncertainty and the decision to phase this subsidy out in September 2025 may set US demand back by 3-5 years.
Some interesting observations on the Chinese EV market:
Chinese EV sales dominated half of 2024 global EV sales. For context, the US EV market is just over an eighth (13%) of the Chinese EV market. Chinese EV demand has also pushed LFP market share (versus nickel market share) past 50% for EV applications for the first time in 2025. China’s LFP market share is forecasted to reach 77% in 2040.
China’s EV subsidy scheme is a dual credit system that subjects all OEMs with vehicles produced in China to a points system delineated by two rules:
Positive points for pure BEV (“Battery Electric Vehicle”) manufacturers (e.g. Tesla) or high-volume NEV (“New Energy Vehicle”) producers (e.g. BAIC).
Negative points for poor fuel efficiency or heavy ICE output (e.g., Nissan, Ford, Lark Auto, Mercedes).
Since BEVs receive the highest subsidies, BEVs are the primary driver of Chinese EV sales, crossing PHEV (“Plug-in Hybrid Electric Vehicle”) sales for the first time in 2025. In addition, this point system has accelerated technical collaboration with OEMs to meet stricter credit standards and incentivized more adoption of alternate chemistries such as sodium-ion batteries.
As of April 2024, China announced an auto trade-in stimulus that subsidizes people trading in an old car for a NEV with 20,000 RMB (US$2,781). While issues are emerging (e.g. local dealers faking sales data to abuse subsidies), this stimulus will hold through 2026. Benchmark did not expect a negative impact on China’s EV sales due to the lower cost of ownership for consumers.
It was interesting to benchmark Chinese OEMs entering the Southeast Asia market from Lily Zhou’s Frost & Sullivan presentation. Each EV company (SAIC, Great Wall, Geely, BYD) targets a different entry, distribution, and sales strategies into Indonesia, Thailand, Myanmar, and Vietnam to name a few.
On a pure battery production front, three notable partnerships include:
CATL’s JV with a state owned Indonesian miner to invest and build a $6B integrated nickel mining to battery production supply chain that ensures stable supply of critical materials and is welcomed by Indonesia to reach its economic growth targets;
BYD’s $1.4B investment into Thailand, opening the automaker’s first plant in Southeast Asia last year, a $500M, 150,000-vehicle capacity plant that also supplies batteries to other automakers in the region;
Gotion High Tech and VES (a battery subsidiary of Vietnam VinGroup) jointly developing the first LFP battery manufacturing plant with a 5 GWh/year capacity in Vietnam.
5. Beyond EVs in Mobility: Ships & Trucks
CATL’s General Manager of its Electric Ship Department, Susan Su, presented on their maritime vessel innovations, which focused on a centralized cloud platform integrated with battery-powered ships, redundant offshore power system, onshore charging, and even battery swapping solutions for cargo ships.
Windrose Truck CEO Wen Han introduced his electric truck business, which closed its US$110M Series B last year and is currently selling in the US, China, Australia and Europe. Windrose claimed ranges of 1100km+ (684 miles, without trailer) and 600km (373 miles, loaded with trailer, 42 tons) - “just enough for the driver to take one rest”. They redesigned the cabin such that the driver sits in the middle to enable better aerodynamics and redesigned the chassis to enable a 700+ kWh battery (on par with Volvo). Both NMC and LFP are offered, with LFP preferred by customers requiring longer cycles and range.
6. What Else We Heard - Tariffs, Parking Lots, Drones, and AI
OEMs are hit hard by US tariffs of 25% on auto imports effective April 2025. Japanese and South Korean OEMs were hit hardest. Mitsubishi is down 17% in US sales YTD and hiked its US car prices by an average of 2.1% this June in response. Dutch automaker Stellantis (Fiat, Jeep owner) is down 10% and expects a full-year loss of $1B to $1.5B from US auto tariffs alone. Let’s see if tariff reductions announced this week, e.g., 25% tariffs on Japan reduced to 15% (versus 10% baseline), ease bearish sentiment for 2H25 forecasts.
How to design carparks better according to ARUP. Load up your parking lots with fire blankets, high pressure sprays, temporary water pools to submerge vehicles, fire resistant construction materials, submersible baths, enough spacing between vehicles to prevent propagation, additional alerts via thermal cameras / audio microphones, etc. It's important to see how electrification demands rethinking of the spaces that support them.
Benchmark Minerals shared their up to date view of solid state auto commercialization timelines, with most current projects either semi-solid (NIO, GM, SAIC) or in prototype state (BMW, Mercedes, Hyundai, Volkswagen, Geely, BYD).
Batteries versus hydrogen: we also saw a demo of hydrogen fuel cell maker HiTS Hydrogen Power Technology (link), which aims to be the BYD of commercial drones powered by hydrogen fuel cells. It deploys its fuel cells for Australian farming applications - a good match for fertilizer distribution in remote locations that require long ranges.
AI was a small but prevalent theme. CATL talked about their 20+ years of traceable data for their manufacturing operations, but there were others too. UnitX showed a cool use case overcoming data bottlenecks in optical defect detection and using generative AI to synthetically augment training datasets when certain defect types are too rare or costly to capture at scale.
SES AI showed their Molecular Universe platform which claims to reduce battery development time from 8 years to 30 minutes by pinpointing which formulations and cell configurations are best suited with greater accuracy than general purpose AI like Grok, DeepSeek, and ChatGPT. Cutting time to qualification and new formulations is a huge challenge - we will be watching for customer traction in AI developments like this.
Conclusion
“I saw all of my competitors outside of the US here, which was very helpful.”
“My Chinese competitors all want us to enter the China market to validate our category for VCs on the sidelines.”
“This may be an unpopular opinion but the US stands to learn a lot by forming domestic JVs with Chinese partners to accelerate American manufacturers’ rate of learning in a game where the US is playing catch-up.”
A conference is incomplete without making new friends and breaking bread - or in this case, typhoon shelter fried prawns (a traditional Hong Kong dish smothered in fried garlic) - to debrief what we each learned from this inaugural gathering in Asia. Shoutout to Volta Foundation for dinner and look forward to continuing this conversation with battery enthusiasts everywhere!
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