According to court filings, CATL initiated legal proceedings on June 25 at the Intermediate People’s Court of Ningde, Fujian, targeting Hithium and five affiliated entities, including its founding executives and several suppliers. The court is set to hear the case on August 12 — coinciding with the critical review period of Hithium’s Hong Kong stock exchange listing application.
The lawsuit alleges that Hithium engaged in systematic poaching of CATL’s technical personnel and developed battery products — notably the 587 Ah cell — with specifications nearly identical to CATL’s own patented designs. CATL emphasizes the energy density deviation between the two products is just 4.4%, well below the 10% technical threshold typically used to differentiate original designs from potential infringements.
Founded in 2019, Hithium has emerged as one of the key players in the global energy storage market. In just five years, the Xiamen-based company climbed to third place globally in lithium-ion storage battery shipments, trailing only CATL and EVE Energy. It now operates or is building production facilities in Xiamen, Chongqing, Shandong, and Texas, with plans to reach over 100 GWh in annual capacity by 2026.
The timing of CATL’s lawsuit is widely viewed as strategic. Under Hong Kong listing rules, companies are required to disclose any material litigation and demonstrate it does not threaten ongoing operations. A court ruling against Hithium — especially one that results in an injunction against its core 587 Ah battery product, which could derail its IPO entirely.
The Hong Kong Stock Exchange’s Listing Rule 8.04 mandates that applicants must not have “material uncertainties” affecting their viability as going concerns. Legal experts warn that the lawsuit could trigger this clause if Hithium fails to convince regulators that its operations will remain unaffected.
This is not CATL’s first courtroom confrontation with emerging rivals. The company has aggressively pursued legal action against China Aviation Lithium Battery (CALB), its second-largest domestic competitor. CATL has filed ten patent infringement suits against CALB since 2022, seeking damages exceeding CNY 1 billion (approx. $140 million). One case resulted in CALB being ordered to pay damages and publicly apologize after a court found it guilty of commercial defamation. In turn, CALB has retaliated with four lawsuits against CATL, seeking a combined CNY 1.007 billion.
CATL has taken similar actions against other players like SVOLT and Tafel. In the Hithium case, however, the stakes may be higher. The dispute not only threatens a potential IPO but also reflects the broader contest for leadership in third-generation high-capacity energy storage batteries — a segment crucial for long-duration storage and grid applications.
Industry observers suggest that the lawsuit is also intended to send a warning to the growing number of CATL alumni who have launched startups in adjacent fields. Hithium’s founder and CEO, Wu Zuyu, and several senior executives are former CATL employees, with Wu himself previously paying a CNY 1 million fine for poaching in violation of a non-compete agreement. The suit may thus serve to reinforce CATL’s so-called “legal moat” around its intellectual property and workforce.
For Hithium, litigation adds to a growing list of financial and operational pressures. The company reported a dramatic turnaround in 2024, with net profits of CNY 288 million after two years of losses. However, its bottom line was bolstered by CNY 414 million in government subsidies — exceeding its net income. The firm’s trade receivables surged to CNY 8.31 billion by year-end, with a 73% debt-to-asset ratio and deteriorating cash flow metrics.
Compounding the risk, one of Hithium’s major U.S. customers, Powin, recently filed for bankruptcy, raising questions over the viability of its international expansion. Meanwhile, China’s storage market continues to face intense price competition, with system prices falling below CNY 0.43/Wh — according to the latest 25 GWh tender result by China Energy Engineer Construction — pressuring margins and financing capacity for smaller players.
Beyond the immediate implications for Hithium, the case underscores a broader trend in China’s battery industry: the increasing use of legal tools by market leaders to suppress emerging competition. As technical standards evolve and high-capacity batteries become the battleground for market share and influence, litigation is quickly becoming a fixture of competition strategy.
