1: You’re starting to see them everywhere... charging stations for electric vehicles (EVs). That’s a sure sign that the global auto industry is going through a massive change. You shouldn’t be surprised, therefore, that experts are predicting that electric vehicles (EVs) will be as cheap as gasoline models by 2025. Or that by the year 2040, one-third of the global auto fleet will be EVs.50 The highest demand for EVs likely will be driven by the world’s biggest economies: Europe, the United States, and China. Rather than fossil-fuel powered cars, which require millions of barrels a day of oil production, batteries are becoming “the” essential products. The decline in oil production—which will lead to serious consequences for oil-exporting countries—is being offset by rising production of lithium-ion batteries.
That’s where the next boom is coming!
The lithium-ion batteries that power EVs are the same type of batteries that power your laptops and smartphones.
Producing those rechargeable batteries, requires cobalt, and the world’s biggest producer of cobalt is Congo. Who do you think is the biggest consumer of cobalt from Congo? It’s not who you might think. It’s China.51 Chinese companies betting big on battery production, are keenly aware of Congo’s importance to controlling the battery market. And these Chinese companies now dominate the first steps in the lithium-ion battery production process and produce over three-fourths of all refined cobalt chemicals.
One Chinese company in particular, Contemporary Amperex Technology Ltd., or CATL, has quickly become the EV battery production leader.52 Now, it’s looking to expand abroad. It’s gearing up by building a massive $1.3 billion battery production complex in Ningde, a city in eastern China.
The complex will be second in size only to Tesla Inc.’s mammoth Gigafactory in Sparks, Nevada. However, with this huge expansion, CATL will surpass the capacity of all other suppliers combined. When the factory is up and running (planned for 2020), it will be the largest EV battery manufacturer in the world. As one consultant described, CATL’s “intentions are very clear.” It wants to be the biggest battery producer in the world, which means doing business beyond China. Right now, however, 99 percent of CATL’s business comes from home contracts in China. Some of these have included foreign automakers that “have been forced to partner with local battery makers” if they want to sell EVs in China. Where is CATL looking to go next? Europe and of course, the United States.
Can it succeed in the global market? Will it be able to compete without government support?
Only time will tell. It’s already acquired a contract manufacturer in Finland and has added offices in Paris and facilities in Germany. It’s definitely making global moves.
Discussion Questions

1. How does this story illustrate a global village?
2. What kind of MNC do you think CATL is? Explain your choice.
3. How would Hofstede’s dimensions of national culture and GLOBE findings be useful to CATL’s management as it moves to Europe and eventually the United States?
4. As much as 14 percent of the cobalt output in Congo comes from mining done by creuseurs or freelancers.53 U.S. and European companies are leery of doing business with cobalt suppliers who buy from these creuseurs, partly because some of the miners are children. These children rarely wear safety masks or other safety equipment and can suffer crippling injuries doing this dangerous job. (a) Does this response by these companies fall under the classical view of social responsibility or the socioeconomic view of social responsibility? Explain. (b) Look at the definition of social responsibility in the chapter and discuss the ethical factors in this scenario.