Battery Revolution: CATL Pulls Further Ahead, SGL Carbon Bows Out, and HPQ Silicon Targets Promising Niches

CATL Cements Its Dominance with Gigafactories

Market leader CATL is expanding its global dominance in batteries, primarily thanks to its enormous manufacturing capacity and financial resources. In 2025, the group's revenue climbed to RMB 423.70 billion, while profit after taxes skyrocketed by 42.28% to RMB 72.20 billion. To supply European automakers directly on-site, the industry leader is investing over 90% of the funds from its latest capital increase into expanding its facilities in Hungary—most notably the Gigafactory in Debrecen. In addition, CATL is investing EUR 4.1 billion together with Stellantis in a separate joint-venture plant in Zaragoza, Spain. Thanks to these new plants, CATL will be able to supply BMW, Volkswagen, Stellantis, Mercedes-Benz, and Tesla in Europe over the long term—trade barriers or not. But scale alone does not yet solve the capacity problem within the individual battery cells. This is where CATL's resourceful researchers come in, constantly driving innovation.

SGL Carbon Faces Off Against Asian Margin Pressure

The German company SGL Carbon was once a leader in battery innovation. But the competition from Asia proved too strong. In 2025, SGL Carbon officially ceased all operations in its Battery Solutions division and had already closed its research laboratory in Meitingen the previous year. Because non-integrated Western processors of synthetic graphite had virtually no chance of survival against Asian competition, SGL Carbon withdrew completely from the market for anode materials. This fundamental shift was reflected in the figures. In fiscal year 2025, revenue fell by 17.2% to EUR 850.2 million, while write-downs pushed net income down to EUR -79.2 million. Instead, the Hesse-based company is focusing entirely on profitable niches such as components for silicon carbide semiconductors, brake discs, and specialty graphite for high-temperature nuclear reactors, where it recently secured a three-year contract worth USD 100 million. In the coming years, SGL Carbon is expected to slowly return to growth.

HPQ Silicon Sets New Standards

In contrast, the Canadian company HPQ Silicon aims to take off with a technology that has a promising future and is focusing on silicon anodes. While conventional graphite is limited to a theoretical density of 372 mAh/g, silicon enables theoretical values of up to 4,200 mAh/g. However, in practice, the material's expansion has so far always led to the rapid destruction of the battery cells. Together with specialists from its portfolio company Novacium, HPQ succeeded in creating an artificial protective layer—using a patented chemical surface treatment with fluorine and sulphur compounds—that prevents these problems.

HPQ also scores points when it comes to costs. Instead of using expensive monosilane gas and costly vapour deposition processes, the company relies on the PUREVAP QRR process developed by its partner PyroGenesis to process metallurgical silicon extracted directly from quartz. This synthesis process triples production volume, reduces energy consumption by 20%, and ultimately cuts anode manufacturing costs by 25% to 30%. Test results also show significant progress in performance. While graphite anodes in the 18650 format remain at 2,778 mAh, the development team has gradually increased capacity across generations—from GEN1 at 3,153 mAh to GEN2 at 3,808 mAh. The GEN3 cells have already reached 4,030 mAh and 6,050 mAh in the 21700 format. The high-performance GEN4 cells in the 21700 format ultimately exceeded all expectations. In extensive test series, the GEN4 silicon anodes achieved an average discharge capacity of over 6,600 mAh, with peak values of 6,696 mAh. According to the company, this represents a 45% increase in capacity compared to the best graphite cells on the market.

HPQ Silicon: Additional Projects Focused on Innovative Materials and Sustainability

In addition to silicon battery anodes, HPQ is advancing other sustainable materials technologies in Québec. Through its subsidiary Silica Polvere, the company plans to collaborate with PyroGenesis to commercialize a novel plasma process that directly converts quartz into high-purity silica, all while producing zero CO₂ emissions. Silicic acid is a raw material used in various industries. At the same time, HPQ is working on systems for the autonomous production of high-pressure hydrogen via silicon hydrolysis, as well as on advanced surface coatings for cathodes. Since HPQ protects its technologies, the company holds a broad portfolio of intellectual property.

Conclusion: HPQ Silicon at a Critical Threshold

HPQ Silicon operates in exciting niches of the materials industry and, based on the key data available so far, could offer its customers significant advantages. However, the team has yet to take the major step toward commercialization. The transition from successful prototype certification to the first supply contracts with cell manufacturers is considered a crucial catalyst for a future revaluation of the stock. But the other technologies also hold potential—sustainability and cost savings are always in demand. With a market capitalization of approximately CAD 68 million, the stock still has room to grow if the company succeeds.