CATL Locks In Copper Supply and Kicks Off Debrecen Trial Runs as Storage Revenue Jumps 87.5%

CATL's board approved a related-party copper deal worth up to USD 320 million and a RMB 12.8 billion share plan, as its Debrecen plant began trial production.

CATL's board signed off Wednesday on a multi-year cathode copper procurement deal with Hong Kong Ansheng, a company in which chairman and majority shareholder Zeng Yuqun indirectly holds 29.4%. Under the arrangement, a wholly owned Hong Kong subsidiary will draw up to 20,000 tonnes of the metal from the supplier across 2027 and 2028, with a total purchase ceiling of USD 320 million. Because the transaction qualifies as a related-party deal, Zeng recused himself from the board vote. For the battery maker, the contract amounts to an early lock on a key input for cell production.

The same board meeting also greenlit a second employee share ownership plan for the current year, aimed at retaining talent. Up to 5,960 staff in middle management and core functions are eligible, with as much as RMB 12.8 billion set aside to cover a maximum of 8.081586 million A-shares. The scheme still requires shareholder meeting approval before it can be implemented.

Storage Emerges as a Second Engine

Away from its traditional passenger car business, CATL is posting steep growth. Energy storage battery systems generated RMB 53.26 billion in revenue in the first half of 2026, an 87.5% surge year over year. Group revenue for the six-month period reached RMB 276.92 billion.

The company is also pushing deeper into commercial vehicles and transport solutions. After unveiling its modular TECTRANS II battery platform on September 14, CATL signed a memorandum of understanding with the DHL Group to jointly test ways of decarbonizing European road freight. It separately agreed to cooperate with Kuehne+Nagel and struck a licensing deal with BME for commercial vehicle batteries in Egypt.

Debrecen Lines Start Trial Output

In Europe, the first two cell production lines at CATL's new plant in Debrecen, Hungary, have been running trial production since September 22. The company opened the highly automated factory to journalists for the first time on Thursday, positioning it as a linchpin of supply chains serving European automakers.

The first phase is designed for 40 gigawatt-hours of annual cell capacity, with two further lines to follow after technical adjustments. Ramping to full capacity in the current stage should take roughly two to four months, according to CATL managing director Shen Feng, with the exact timing dependent on ramp speed, quality control and customer validation. Following earlier regulatory reviews and occupational safety inspections, the company considers conditions for test operations met, though official checks continue. To meet environmental requirements, the plant uses adiabatic cooling towers intended to cut industrial water consumption by 30%. The full project is ultimately planned for 100 gigawatt-hours.

Total investment in Debrecen is put at around EUR 7.34 billion. About 900 billion forint has flowed into the Hungarian site so far, where roughly 2,900 people are employed. Some 540,000 battery modules have already been produced there since autumn 2024.

Political Headwinds and a Shifting Customer Base

The ramp-up has not been without friction. A debate erupted Thursday over alleged state support, with opposition figures claiming the project receives direct and indirect benefits worth around 320 billion forint, including infrastructure measures. CATL rejected that figure, saying it is aware only of a 2025 subsidy agreement in the single-digit billions of forint whose exact size is confidential.

Meanwhile, the stock has come under pressure. Shares have shed 4.7% over roughly the past two weeks amid market fears that Chinese automakers such as Li Auto and Xiaomi are widening their supplier bases, while Xpeng plans to build its own battery packs. Even so, CATL held a 41.45% share of Chinese traction battery installations in August, according to media reports.

Hungary remains a strategic node for the world's largest battery maker as it seeks to serve growing European demand locally. More activity is already taking shape at the site: a local group subsidiary plans an additional facility in the same industrial park for further processing of battery systems. According to an analysis by environmental group Transport & Environment, more than 85% of active European battery cell capacity currently belongs to non-European manufacturers.