TIP840: CATL: Powering EVs, Power Grids, and AI w/ Stig Brodersen, Manish Karira & Ralph Summerford

**SPEAKER_1** (0:00)
You're listening to TIP.

**Stig Brodersen** (0:03)
In today's episode, we're doing a bull and bear debate on CATL, the world's largest battery maker. My friend Manish Karira presents the bull case, and Ralph Summerford, another dear friend and forensic accountant who spent his time chasing financial shenanigans, of course, plays the bear.
Now, chances are that you never heard of the company. Well, Ralph and I certainly hadn't either. We didn't even know it was pronounced CATL or CATL. But if you've ever been in a Tesla or in a BMW, odds are that it ran on one of the batteries.
Manish walks us through how CATL came to control 4% of the global EV battery market, and why energy storage for AI data centers might be the growth engine the market hasn't priced in. Ralph digs into price deflation, an interest-free supplier float, and geopolitical risks that could hit with the stroke of a pen. Whenever we're bullish on a stock, we tend to surround ourselves with people who agree with us. We like to sit in echo chambers, we like to all agree how smart we are because we all invest in the same thing. And if the thesis doesn't plan out, we can always come up with a reason why Mr. Mahncke is just manic and doesn't see what we see. But of course, it's only a question before he realizes how wrong he is. Well, sometimes it happens and sometimes it doesn't happen. The point I'm trying to make is that we invited Ralph here to be the bear. And not only today, but every quarter, we're going to have an episode just like this, where we're going to debate from a bull and a bear perspective. And I should also mention that both Ralph and Manish are members of a TIP mastermind community, and we meet online and in person. Now, members are automatically invited to our live events.
Like the Intrinsic Value Conference in New York City here on September 19th. And you can read more about how to attend in the show notes. But without further ado, let's jump right into the episode.

**SPEAKER_1** (2:02)
Since 2014, with more than 200 million downloads, we have interviewed the world's best investors, studied deeply the principles of value investing, and uncovered many compelling investment opportunities.
We focus on understanding businesses and intrinsic value, investing accordingly, and sharing everything we learn with you. This show is not investment advice. It's intended for informational and entertainment purposes only. All opinions expressed by hosts and guests are solely their own, and they may have investments in the securities discussed. Now for your host, Stig Brodersen.

**Stig Brodersen** (2:47)
Welcome to The Investor's Podcast. I'm your host, Stig Brodersen, and today I'm here with my friends, Ralph and Manish. Pjens, how are you today?

**Ralph Summerford** (2:55)
Doing great.

**Manish Karira** (2:56)
Doing great, Stig. Thank you for having us.

**Ralph Summerford** (2:59)
Yeah, glad to be here.

**Stig Brodersen** (3:01)
Fantastic. Manish, you're presenting the Bullcase for a huge company, and perhaps it's a company that the audience doesn't even know about.
I'm happy to say that in the first part of this episode, you will give us an overview of the business, and then we'll open the floor for perhaps a discussion among the three of us about some related things. But anyways, I'm getting way ahead of myself, so let's just jump right into it, Manish. Please tell us about the company.

**Manish Karira** (3:29)
Thanks, Stig. This company that I would like to introduce today controls 40% market share in a growing industry.
Most people probably have never seen their products. But if you have been in a Tesla or an electric BMW or a Mercedes, there is more than a one-third chance that you have... You were on the vehicle that was running on one of their products. The company I'm talking about is CATL, Contemporary Amperix Technology Limited, the largest battery maker in the world. As of the most recent stock price, its market cap is about $280 billion, which means they are roughly the size of Shell.
My main thesis on CATL is that this company is more than a battery company. I think it is fast becoming the backbone of the energy infrastructure. It powers EVs, it stores renewable power, and now increasingly, it's becoming the core power infrastructure player in the AI data centers.

**Ralph Summerford** (4:32)
You know, Manish, I have to admit when I first discussed this company with you when we talked about it, I'd never heard of CATL. I wasn't even sure if you pronounced it cattle or CATL.
What's the founding story about this company?

**Manish Karira** (4:51)
Yeah, it's not a well-known company in the Western world, but the company has a very interesting backstory.