The monthly profit margin of automobile manufacturers is only 1.8%, while the battery giant earns 230 million yuan per day.

"For consumers, CATL's batteries guarantee quality; for car manufacturers, using CATL's batteries guarantees high - end status," a battery industry insider once told Tech Planet.

However, as market competition intensifies, the pattern once dominated by leading enterprises is changing.

Data from 2025 shows that although the "twin kings" of the battery industry, CATL and BYD, still hold an absolute industry advantage, with a combined market share of 65.02%, it has significantly shrunk compared with the high of over 70% in 2023.

Among them, CATL's market share in 2025 dropped from 45.08% in 2024 to 43.42%, and BYD's dropped from 24.74% to 21.58%.

Meanwhile, mainstream second - tier battery enterprises have successfully broken through and ranked among the top. The market shares of CALB, Guoxuan High - tech, and EVE Energy in 2025 increased to 6.98%, 5.65%, and 4.11% respectively, firmly ranking third to fifth in the industry. The rankings and shares of enterprises such as Sunwoda, Honeycomb Energy, Ruipu Lanjun, and Zenl Energy also showed slight fluctuations, and the industry competition has entered a stalemate.

Five years ago, almost all new - energy vehicle manufacturers had to queue up to compete for CATL's battery quotas, but now it's different. More second - tier battery manufacturers have successfully joined the game and become new "shovel sellers" in the new - energy track.

01

Four Years of "Decoupling from CATL": Second - tier Manufacturers Join the Game

Back in 2022 at the World Power Battery Conference, Zeng Qinghong, the chairman of GAC Group, made a complaint that sparked industry discussions: "Aren't I working for CATL?" At that time, Zeng Yujun, the chairman of CATL, was sitting in the audience.

That year was a crucial node for the rapid development of new - energy vehicle manufacturers. The surging market demand for power batteries extended CATL's order backlog. There was even a rumor in the market that He Xiaopeng, the founder of XPeng Motors, once camped at CATL's factory for a week to get battery quotas.

Power batteries always occupy a core position in the BOM (Bill of Materials) cost of new - energy vehicles. Although this proportion has decreased with technological iteration, it still remains between 30% and 40%.

For car manufacturers, batteries are not only the key to the delivery rhythm but also directly related to the pricing power. Relying on a single supplier for a long time is like being "strangled by the neck."

In order to get rid of excessive dependence on CATL and avoid having their profit margins and production rhythms locked in, "decoupling from CATL" became the common choice of many car manufacturers at that time.

This transformation wave driven by industry anxiety also gave second - tier battery manufacturers an opportunity to rise. Enterprises such as Zenl Energy, CALB, Guoxuan High - tech, and EVE Energy took advantage of the situation to break through and quickly seize market shares.

Meanwhile, some car manufacturers simply chose to be self - sufficient. GAC established Inpai Battery, Great Wall Motors incubated Honeycomb Energy, and NIO also tried to develop lithium iron manganese phosphate batteries independently. Multiple paths were taken to break the original industry supply pattern.

As a result, second - and third - tier manufacturers such as CALB, Sunwoda, and Zenl Energy have successively won a large number of new orders from car manufacturers' "decoupling from CATL" needs in the past two years.

CALB successfully won orders from leading car manufacturers such as GAC Aion and XPeng from CATL, which not only promoted a significant increase in its installed capacity. Sunwoda won the battery fixed - point projects for Li Auto's M8, M7, and Xiaomi's third - model, becoming one of the core suppliers for mainstream car manufacturers.

Even Zenl Energy, which was established not long ago, won orders from mainstream car manufacturers such as SAIC - GM - Wuling and Leapmotor in this trend.

"Compared with CATL, second - tier battery manufacturers are more price - competitive. They are not only willing to offer concessions in cooperation but also can respond more flexibly and meet the customized needs of OEMs," the above - mentioned battery industry insider commented.

Second - tier battery manufacturers fill the market gap with higher cooperation flexibility while meeting the cost - reduction and autonomy needs of car manufacturers, becoming candidates other than CATL.

This has also led to the rapid rise of second - tier battery manufacturers. Guoxuan High - tech's net profit in the first three quarters of 2025 was 2.533 billion yuan, a year - on - year increase of 514%. Ruipu Lanjun turned losses into profits, with a net profit of 681 million yuan. Zenl Energy's net profit was 809 million yuan, a year - on - year increase of 788.4%.

Diversification of the supply chain is an industry trend. Even Tesla is continuously expanding its battery suppliers.

According to 36Kr, Sunwoda Power has officially entered Tesla's global supply chain, becoming its fifth power - battery cooperation partner. Under the reconstruction of the supply - demand pattern, the growth dividends of second - tier battery manufacturers continue.

02

High Barriers to Battery Replacement: Car Manufacturers Struggle to Break Away from Leading Manufacturers

"Batteries are to new - energy vehicles what engines are to fuel - powered vehicles. Their core attributes are highly integrated. They are not ordinary components, and battery suppliers cannot be replaced at will. It definitely requires a long adaptation period and a running - in process," a person in the automotive industry frankly said.

Batteries are not independent and universal accessories but a core technology assembly deeply integrated with the vehicle chassis architecture, BMS battery management system, thermal management system, vehicle electronic control, and body structure.

The industry insider explained that if a mass - produced model in sales changes its battery supplier midway, it will take at least half a year to a year to complete the full - process adaptation. If it is a newly developed model, the switching period will be further extended.

Meanwhile, changing the supply chain will also incur high R & D and transformation costs, production - line transformation costs, and multiple hidden costs such as technological and quality - control running - in between car manufacturers and new battery manufacturers.

From the consumer side, consumers are highly sensitive to the vehicle battery brand. Once a car manufacturer switches from a leading battery enterprise to a second - tier manufacturer, it is easy to be labeled by users as "down - grading in configuration and quality," which may even directly drag down the model's reputation and market sales.

On various social platforms, many car owners have complained that they found the battery manufacturer had been changed after picking up the car, and the car manufacturer did not inform them in advance. Some consumers are also worried that replacing the original battery with a niche brand may pose quality and safety risks in subsequent vehicle use.

Therefore, for most car manufacturers, leading battery enterprises are still the core and necessary part of the supply chain. The mainstream industry strategy is not to directly replace the original main supplier but to introduce secondary and tertiary supply systems on the basis of maintaining core cooperation, and balance costs and the safety of the industrial and supply chains through a multi - supplier layout.

Take XPeng Motors as an example. In the early years, the brand introduced battery manufacturers such as CALB and Sunwoda in several best - selling models in an attempt to reduce its dependence on CATL.

Subsequently, considering the quality positioning, market reputation, and comprehensive performance of high - end models, it returned to using CATL batteries in the high - end series to balance costs and brand tonality.

The strategy of diversified supply by car manufacturers has slowed down the process of "high concentration" in the industry but has not curbed the expansion momentum of leading battery enterprises.

Combined with the statistics from SNE Research, in terms of CATL's customer structure, the sales proportion of its top five core customers has risen from 29.7% in 2020 to 38.9% in 2025, and the trend of centralized procurement by leading car manufacturers is still prominent.

03

From Working for CATL to Working for All Battery Manufacturers?

In the discussion of the new - energy industrial chain, the imbalance in profit distribution between the upstream and downstream has always been an unavoidable topic.

On April 15, CATL released its first - quarter financial report for 2026. Its current revenue reached 129.1 billion yuan, a year - on - year increase of 52%. The net profit attributable to shareholders was 20.7 billion yuan, a year - on - year increase of 48%. Calculated, the daily net profit was as high as 230 million yuan, showing a very impressive profit performance.

Leading battery enterprises have strong profitability. In contrast, downstream vehicle manufacturers are under continuous pressure on their profit margins, and their business situations are becoming more and more difficult.

Cui Dongshu, the secretary - general of the China Passenger Car Association, once publicly stated that the overall sales profit margin of the domestic automobile industry in 2025 was only 4.1%, and in some months, it even fell below 2%, significantly lower than the average profit margin of 5.9% in the manufacturing industry. In December 2025, the monthly profit margin of the industry was only 1.8%, indicating extremely weak profitability.

The current situation of weak profitability in the downstream is more prominent when it comes to specific car manufacturers.

In 2025, Li Auto's annual revenue was 112.313 billion yuan, a year - on - year decline of 22.25%. The net profit dropped significantly to 1.139 billion yuan, a year - on - year plunge of 85.84%. NIO still suffered losses throughout the year, with a net loss of 14.943 billion yuan. Although the year - on - year decline narrowed by 33.3%, it still failed to get out of the red for the whole year and only achieved phased profitability in the fourth quarter. XPeng also faced long - term pressure, with an annual net loss of 1.139 billion yuan. Although the loss scale narrowed significantly by 80.3% year - on - year, it only achieved single - quarter profitability for the first time in the fourth quarter, and the overall business pressure remained severe.

The profit differentiation is not only reflected in CATL. The profitability of the entire battery track has improved collectively.

Not only does the leading "King Ning" have significant advantages, but many second - tier battery manufacturers have also seen a significant recovery in profits.

Among them, Zenl Energy's net profit soared by 788% last year, and CALB's net profit increased by 148% year - on - year. Ruipu Lanjun, which had suffered losses for a long time, successfully turned losses into profits, with an annual net profit of nearly 700 million yuan. Guoxuan High - tech also achieved its first profit of 540 million yuan in 2025.

On one hand, there is a profit carnival for battery manufacturers across the chain; on the other hand, vehicle enterprises are struggling for profits.

For car manufacturers, facing such a disparate profit - distribution pattern, even though their profits are squeezed by battery manufacturers, it is also limited by multiple practical problems such as capital investment, technological barriers, production - capacity construction, and supply - chain coordination if they want to break through the shackles through self - developed batteries.

Tesla, the global leader in new - energy vehicles, is a typical example. As early as 2020, it announced the self - development of 4680 large - cylindrical batteries, planning to achieve self - supply with higher performance and lower costs and laid out self - built production lines at its Texas factory. However, the mass - production progress of the project has been postponed many times, and the implementation has fallen short of expectations. So far, it still cannot get rid of external battery procurement, and full self - development and self - supply are difficult to achieve.

Not only Tesla, but many domestic car manufacturers have also increased their layout in self - developed batteries. GAC Aion, Zeekr, NIO, Geely, Great Wall, Voyah, Wuling, SAIC, etc. have all successively announced plans for self - developed batteries or self - built production capacity.

However, industry insiders frankly said that battery manufacturing is a typical heavy - asset track. The upfront R & D and production - line construction require huge investments. In the short term, the unit cost of self - developed batteries is higher than directly purchasing mature mass - produced batteries, and it is difficult to form a cost advantage.

Now car manufacturers want to get rid of their dependence on CATL but find they can't bypass the entire battery industry: it's difficult to change suppliers, self - development is costly, it's getting harder and harder for vehicle enterprises to make money, while battery enterprises generally see a significant increase in profits.

This game between the upstream and downstream will not end. Car manufacturers can only look for multiple suppliers on one hand and passively accept the compression of profits on the other hand, coexisting with battery manufacturers in the long term.

This article is from the WeChat official account "Tech Planet" (ID: tech618), author: Ren Xueyun, published by 36Kr with permission.