Automakers are vying for the right of discourse in the power battery sector. Is CATL afraid?
The game between automakers and CATL has once again become a hot topic in the market, as Li Auto and Xiaomi Auto have recently accelerated their cooperation with second-tier battery manufacturers.
On September 10, the China Association of Automobile Manufacturers released the production and sales data of automobiles for August. The proportion of new energy vehicle new car sales in total sales reached 60.6%, hitting a new record high for monthly sales share. The continuous improvement of automobile electrification has directly driven the explosive growth of power battery demand. Data released by the South Korean research institution SNE Research shows that from January to June 2026, the total global installed capacity of power batteries reached 608.5GWh, a year-on-year increase of 20%.
The power battery is the single component with the highest proportion in the cost of new energy vehicles, and it is also the core variable affecting the profits of automakers. The game around power batteries has never stopped. As the world's largest power battery supplier, CATL is a cooperation target that automakers compete for. Automakers use CATL's batteries to endorse their own products; but at the same time, against the backdrop of intensifying price wars in the auto market and declining profits of automakers, CATL is also a "profit devourer" that automakers are trying to get rid of.
The contradictory relationship between automakers and CATL is not simply "a mix of love and hate", but a battle for profit distribution and discourse power between the battery oligarch and automakers.
01. The Spring of Second-tier Battery Manufacturers
The current power battery industry presents a pattern of "two superpowers and many strong players". The "two superpowers" refer to CATL and BYD. Most of BYD's batteries are for its own vehicles, and CATL is the largest external battery supplier, playing a pure "supplier" role. Players in the second echelon include CALB, Gotion High-Tech, Sunwoda, EVE Energy, etc., and there is a clear gap in market scale compared with CATL and BYD.
At present, Chinese vehicle enterprises mainly adopt three mainstream power battery guarantee methods: the first is the full self-research and self-production model similar to BYD, the second is the combination of self-research and external supply, and the third is the model of automaker definition + battery manufacturer OEM.
CATL is deeply embedded in the supply chain of mainstream domestic automakers and is the core battery supplier for the vast majority of automakers. The cooperation targets of automakers for secondary suppliers, tertiary suppliers, and self-research are usually second-tier battery manufacturers.
Recently, Li Auto and Xiaomi Auto have accelerated their binding with second-tier battery manufacturers in the field of power batteries through capital increase, strategic cooperation and other methods.
On September 4, Sunwoda announced that Beijing Li Auto Co., Ltd. will invest 2.65 billion yuan to increase the capital of its subsidiary Sunwoda Electric Vehicle Battery. After the capital increase is completed, Leading Ideal HK Limited, an important Hong Kong shareholding platform in Li Auto Group's structure, indirectly holds a total of 11.17% of the shares of Sunwoda Electric Vehicle Battery, becoming its second largest shareholder.
The substantial increase in shareholding has pushed the relationship between Li Auto and Sunwoda from "in-depth cooperation and light capital binding" to "major shareholder-level strategic binding", making the relationship between the two sides closer.
At present, the power batteries of Li Auto are mainly supplied by CATL and Sunwoda, and a third new supplier CALB was introduced in September. Does increasing the capital-level binding with Sunwoda mean that Li Auto's orders to Sunwoda will also increase accordingly?
In this regard, the author called Sunwoda's securities department as an investor, and the relevant staff said that Li Auto's capital increase does not constitute an inevitability at the business level, but the cooperation will definitely be closer. Sunwoda has always been a core supplier of Li Auto. In the first half of 2026, Li Auto ranked roughly first or second among Sunwoda's customers.
It is still unknown how many orders Li Auto can obtain from Sunwoda in the future, but CATL's share is bound to face pressure. Li Auto said that at present, Li Auto's self-developed batteries have been installed on Li Auto L8, Li Auto L6 and Li Auto i8, and in the future, Li Auto's self-developed batteries will be fully installed on all models.
Specifically, for the installation plan of Li Auto models in the fourth quarter: the first batch of deliveries of the new generation Li Auto MEGA uses CATL's 5C ternary lithium battery, and the current reserve is about to be exhausted. Orders locked at 15:00 on September 7 and after will be switched to Li Auto's self-developed 5C ternary lithium battery; the new Li Auto i9 released in mid-September will be first equipped with CATL's 5C ternary lithium battery, and after the production ramp-up of self-developed batteries is completed, it will be fully switched to Li Auto's self-developed 5C ternary lithium battery; the 2026 Li Auto i6 will be launched in the fourth quarter, equipped with Li Auto's self-developed 5C battery and self-developed Mach chip.
The new car's batteries start with CATL's batteries and then move to full self-development, which means that Li Auto is gradually decoupling from CATL.
The power battery of Xiaomi Auto's new Pengcheng series extended-range SUV launched on September 7 has no share of CATL at all. This model adopts Xiaomi Longjia Battery, which is led by Xiaomi Auto and jointly built with CALB and Sunwoda Electric Vehicle Battery. Among them, Sunwoda is responsible for the 52kWh LFP battery equipped on N70 Pro, and CALB is responsible for the 76kWh ternary lithium battery equipped on N70 Max and N90 Max.
In terms of the specific division of labor for Xiaomi Longjia Battery, Xiaomi Auto is responsible for product definition, leading the design and development of the battery pack, participating in the design and development of the cells, and full-process quality control of the whole chain. The core is "Xiaomi takes full responsibility for the whole chain". CALB customizes and develops the electrochemical system and materials according to the definition of Xiaomi Longjia Battery, Sunwoda Electric Vehicle Battery provides cell manufacturing capacity for Longjia Battery, and both have built exclusive production lines.
02. Product Under the Game of Interests
The move of Li Auto and Xiaomi Auto to deepen their cooperation with second-tier battery manufacturers such as Sunwoda and CALB has been interpreted by the market as an important signal of "de-CATLization".
In addition to Li Auto and Xiaomi Auto, there are other automakers that cooperate with CATL who have intervened in battery self-research through various means. What kind of impact will this have on CATL? What measures does CATL have to stabilize its cooperation with automakers? DoNews contacted a person from CATL's public relations department on this matter, but no response was obtained.
DoNews noted that affected by factors such as the public opinion of "de-CATLization" and the delay in CATL's huge share repurchase plan, CATL's stock price has continued to fall recently, and on September 8, it fell by 3.65% with expanded trading volume.
Although CATL announced the amount and price of its first repurchase of A-shares on September 11 (the total transaction amount was 200 million yuan, and the lowest transaction price was 330.15 yuan per share), it failed to reverse the downward trend. On September 15, CATL's stock fell again with expanded trading volume, down 6.16%, and hit a recent lowest price of 316 yuan per share.
In fact, the "de-CATLization" of automakers has lasted for many years. In 2022, Zeng Qinghong, former chairman of Guangzhou Automobile Group Co., Ltd., publicly stated that power batteries account for 40%, 50% and 60% of the total cost of automobiles, and the proportion is constantly increasing. "Aren't I working for CATL now?"
Zeng Qinghong's move brought the dissatisfaction of automakers with battery costs to the table, triggering widespread discussion. Since then, it has become a trend for automakers to self-develop or introduce other battery suppliers. Almost all large automakers have their own self-developed batteries, such as GAC's Magazine Battery, Chery's Rhino Battery, Changan's Golden Shield Battery, Geely's Divine Shield Battery, etc.
Now, leading new energy vehicle brands such as Li Auto and Xiaomi Auto have collectively followed up on self-research. While this is partly out of consideration for ensuring supply chain security and discourse power, the core reason also points to the cost problem.
Mo Ke, chief researcher of True Lithium Research Institute, a Chinese new energy industry research institution, told DoNews that automakers want to break away from CATL mainly for interest demands. Judging from the 2025 financial report, CATL's net profit margin can reach 18%, but that of vehicle manufacturers is only 2-3 percentage points or 4-5 percentage points. CATL's profit alone is equivalent to the sum of the top 7 vehicle manufacturers.
In Mo Ke's view, the resurgence of "de-CATLization" this time is mainly due to the 2% consumption tax levied on batteries.
According to the "Announcement on Adjusting Some Battery Consumption Tax Policies" issued by the Ministry of Finance, the General Administration of Customs and the State Taxation Administration, from September 1, 2026, consumption tax will be levied on five types of batteries including lithium-ion batteries at a rate of 2%. This move ended the 11-year tax exemption period for lithium batteries. Combined with the policy that the new energy vehicle purchase tax has been changed from full exemption to half reduction since this year, the performance of vehicle manufacturers is under pressure.
"Before the implementation, both vehicle manufacturers and battery manufacturers were negotiating. Theoretically, these two percentage points of consumption tax should be borne by vehicle manufacturers. But there is a certain room for maneuver. At present, in most cases, battery manufacturers and vehicle manufacturers each bear one percentage point of the consumption tax. But for CATL, it may share the burden with customers it considers important, and for secondary customers, it may be more tough, requiring vehicle manufacturers to bear all two percentage points. I estimate that Li Auto and Xiaomi have suffered losses in this regard."
03. CATL That Is Hard to Separate From
Although automakers have kept taking "de-CATLization" actions, CATL still occupies a dominant position in terms of market share.
Data released by the South Korean research institution SNE Research shows that from January to June 2026, CATL ranked first in the world with an installed capacity of 242.7GWh, a year-on-year increase of 25.3%, and its market share rose from 38.2% in the same period of last year to 39.9%. Although the installed capacity of Chinese second-tier battery manufacturers is growing, their market share is only about 5% or even lower, and there is still a huge gap compared with CATL.
In terms of capacity utilization, CATL is operating at nearly full capacity. In 2025 and the first half of 2026, the capacity utilization rate of CATL's battery systems reached 96.9% and 94.86% respectively.
The relevant staff of Sunwoda's securities department mentioned earlier told the author that in the first half of 2026, the capacity utilization rate of Sunwoda's pure power batteries was close to 70%; the energy storage sector was in short supply, and the capacity utilization rate was almost full.
Although automakers have not succeeded in getting rid of CATL, Mo Ke believes that it is still necessary for vehicle manufacturers to self-develop batteries. He further analyzed to DoNews that self-developed batteries can enable vehicle manufacturers to have a deeper understanding of batteries, know how to select batteries, and how to put forward demands for specific product characteristics to battery manufacturers.
However, in Mo Ke's view, it is not necessary for vehicle manufacturers to intervene in the production end of self-developed batteries. Mo Ke told DoNews that there are only two paths for vehicle manufacturers to self-develop batteries: one is to build their own battery factories, and the other is to hand over the developed battery technology to battery partners for production.
"Vehicle manufacturers that build their own battery factories can produce some batteries for temporary emergency and supplementary purposes, but if they use their own batteries entirely, the risk is very high. Because it is easy to produce batteries, but it is not easy to make good batteries. In particular, automotive power batteries have extremely high requirements for the stability and consistency of battery products. If these requirements cannot be met, problems with vehicles will damage their own brand instead."
"If vehicle manufacturers develop technology themselves and let battery manufacturers produce it, cost control is critical. It costs money from technology development to converting technology into products, and there is a running-in cost when handing over mass production to others. The sum of these costs may be more expensive than buying batteries from CATL."
"Therefore, neither of the two paths is feasible, which is why vehicle manufacturers have been talking about getting rid of CATL but cannot do so," Mo Ke concluded.
Judging from public information, there are also risks in the cooperation between vehicle manufacturers and second-tier battery manufacturers. For example, at the beginning of this year, Sunwoda experienced a serious battery quality incident, which led to the recall of more than 38,000 units of Zeekr 001 WE version, and Sunwoda Electric Vehicle Battery also needed to pay 608 million yuan in compensation. For another example, in July, CALB was exposed to the "banana battery" quality incident. A large number of GAC AION S series operating vehicles equipped with CALB's 177Ah LFP cells had concentrated problems such as cell swelling, liquid leakage, and insulation failure.
In addition, in the process of vehicle manufacturers continuously promoting "de-CATLization", CATL also has "counterattack" measures. In addition to refining battery technology, CATL is continuously improving consumer awareness. For example, it has placed the advertisement of "Choose electric vehicles, make sure they are equipped with CATL batteries" in crowded offline places such as airports and high-speed railway stations, and also intensively placed it in the broadcasts of top events such as the European Cup and the Olympic Games.
DoNews noted that when vehicle manufacturers promote new products, especially new cars of new brands, they often take the use of CATL power batteries as an important publicity point. These behaviors also promote CATL to a certain extent, helping to build consumers' awareness that "CATL equals high-quality products".
Conclusion
CATL has advantages in technology, brand, market share and other aspects, and has an extremely deep moat in the power battery industry. Its position is difficult to be shaken in the short term. Automakers have huge demand for high-quality power batteries, and at the same time have demand for cost control, and want to have discourse power and bargaining power in terms of batteries and delivery rhythm. The game between the two sides will continue.
This article is from the WeChat public account "DoNews" (ID: ilovedonews), author: Xu Yun, editor: Yang Bocheng, published with authorization from 36Kr.