Battery giant CATL will reward suppliers that cut emissions

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🗞️ Driving the news: Contemporary Amperex Technology Co. Ltd. (CATL), the world’s largest EV battery producer, is offering preferential purchasing incentives to suppliers that reduce emissions
• The initiative supports CATL’s aim to achieve carbon neutrality across core operations by 2025 and across its entire supply chain by 2035

🔭 The context: CATL (see sustainability performance) supplies major automakers including Tesla, Volkswagen, and Ford
• As global battery demand rises, scrutiny over emissions linked to raw materials and energy-intensive manufacturing has intensified, particularly in China, which leads battery production but faces high emissions intensity
• In 2024, CATL’s supply chain (Scope 3) emissions made up 95% of its total 118.3 million tonnes CO₂e

🌍 Why it matters for the planet: EV batteries are central to decarbonizing transport and energy systems, but their environmental footprint hinges on material sourcing and manufacturing practices
• By incentivizing cleaner supply chains, CATL’s strategy may set a precedent in the sector, helping to lower life-cycle emissions and support climate-aligned growth in clean technologies

⏭️ What's next: CATL will continue evaluating the carbon footprint of suppliers — already assessing over 130 companies for key components like graphite and aluminum
• The company is also offering technological assistance to help partners decarbonize
• These efforts could influence industry standards and place pressure on global suppliers to meet stricter ESG benchmarks in the coming years

💬 One quote: “Our suppliers are working hard. We have some incentives to buy more from them if they meet the ESG target better,” — Robin Zeng, Founder and Chairman, CATL

📈 One stat: In 2024, CATL reported 118.3 million tonnes of CO₂e emissions, with 95% from its supply chain (Scope 3)

See on illuminem's Data Hub™ the sustainability performance of CATL and its peers BYD, and Panasonic

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