As CATL's Hong Kong listing approached in May 2025, sentiment toward domestic Chinese equities remained deeply skeptical. Investors were still grappling with China's property drag, policy uncertainty, geopolitical pressure, tariffs, and concerns about industrial overcapacity. In many portfolios, the word "China" had become a risk label before the business analysis even began.
That context made CATL interesting. The company was not a generic domestic Chinese equity. It was a scaled global battery platform at the center of electric vehicles, renewable power, and battery energy storage. Our investment around the Hong Kong listing was not a bet that sentiment toward China would suddenly improve. It was a view that the market was underappreciating a world-leading industrial platform because it sat within a complex country narrative.
Behind the negative sentiment toward Chinese equities was a company helping determine the global cost curve for electrification.
Batteries are the gatekeeper
The energy transition is often framed by ambition: more electric vehicles, more renewable power, more storage, and lower emissions. Yet adoption is rarely driven by ambition alone. It is driven by cost, reliability, convenience, and trust. In electrification, the battery sits at the center of all four.
In an electric vehicle, the battery is one of the largest cost drivers. It affects range, charging time, safety, weight, durability, and resale value. In energy storage, the battery determines how effectively intermittent renewable power can be shifted from when it is produced to when it is needed. In both markets, better batteries are not only about better technology. They are about lowering the total cost of ownership.
That is why CATL fits naturally within Olduvai's affordability lens. If battery costs fall while performance improves, the addressable market expands. More consumers can consider electric vehicles. More fleets can justify electrification. More utilities and commercial users can add storage. More emerging markets can use storage to manage unreliable grids, expensive diesel generation, and the intermittency of renewables.
What sharpened our view
Our perspective was sharpened by what we saw across emerging markets. Renewable power was no longer only a developed-market decarbonization story. Solar, wind, and battery storage were becoming practical tools for countries and companies seeking to address power costs, reliability, and access. In many markets, the question was not ideological. It was economic: can storage make the system cheaper, more reliable, and more usable?
That observation broadened the CATL case. The company was not only leveraged to passenger EV growth in China or Europe. It was exposed to a wider electrification stack: EVs, commercial fleets, grid storage, industrial power, and the gradual shift toward distributed energy systems. Batteries were becoming part of the infrastructure layer underpinning affordability.
The manufacturing learning curve
Battery leadership is not only a chemistry problem. It is also a manufacturing problem. A scaled battery leader needs process control, procurement depth, equipment know-how, yield discipline, customer integration, and the ability to move innovations from lab to factory without sacrificing safety or reliability.
CATL's advantage comes from operating at the center of that system. Scale improves purchasing power and learning. Learning improves cost and quality. Cost and quality improve customer adoption. Customer adoption generates more data, more manufacturing feedback, and more opportunities to reinvest. Over time, that can become a compounding loop.
This pattern is similar to what we look for in other affordability leaders. The best companies do not merely cut prices. They build structural cost advantages and then use those advantages to broaden access, strengthen customer relationships, and defend their economics.
China risk, global platform
The risks were not minor. Battery markets can become brutally competitive. Customers may seek to internalize supply. Automakers may pressure suppliers to lower prices. Trade barriers and localization requirements can fragment global manufacturing. Technology can shift. Raw material cycles can help or hurt margins. Overcapacity can turn a strong industry narrative into weak shareholder returns.
CATL could not be viewed as a simple EV theme. The deeper question was whether the company could continue converting scale into manufacturing advantage, customer relevance, and cost leadership even as the industry matured and competition intensified.
Why the case matters
CATL illustrates the industrial side of affordability. The world may want electrification, but customers adopt when products are economically viable. Batteries are the bridge between ambition and adoption.
For Olduvai, the lesson is not only that batteries will grow. It is that complex markets can hide globally important companies. When investors are focused on country risk, policy noise, or negative sentiment toward an entire market, the opportunity is to separate the label from the business. In CATL's case, we saw a Chinese company, but also a global platform shaping the cost of electrification.