Summary of Key Points
This news article focuses on the trend of new energy vehicle companies moving away from relying solely on CATL (Contemporary Amperex Technology Co., Ltd.). Companies that previously relied on CATL, such as WM Motor, Li Auto, and Xiaomi, have begun to introduce alternative battery suppliers, leading to a decline in CATL's domestic market share. The underlying reason is that vehicle manufacturers are seeking to reduce costs and weaken CATL's bargaining power by diversifying their supply chains. Although CATL holds a technological advantage with products like its ultra-fast charging batteries and Kirin batteries, its high profits have created an imbalance in the industry, as its net profit exceeds the combined earnings of 11 other companies. Additionally, CATL's dominant behavior (such as implementing non-compete clauses and making aggressive acquisitions) has sparked controversy and potential policy risks, similar to what happened with Ctrip.
1. The Trend of Vehicle Manufacturers Moving Away from Relying on CATL
Once, almost all vehicle manufacturers used CATL batteries, but now more are looking for alternative suppliers:
- WM Motor M6 Pure Electric Version: Uses batteries from Guoxuan High-Tech, a subsidiary of HarmonyOS;
- Li Auto L8: Has shifted its battery supply to Xinxinda, ending its exclusive partnership with CATL;
- Other Manufacturers: Xiaomi, XPeng, Leapmotor, GAC Aion, and others have also diversified their suppliers.
Why are they doing this? Vehicle manufacturers don't want to be at the mercy of CATL's demands—CATL once had too much control over market prices. By having multiple suppliers, they can negotiate lower prices and reduce supply chain risks (such as shortages or price increases).
2. Decline in CATL's Domestic Market Share
Although CATL still holds a 39.2% global market share in 2025 (an increase of 1.2 percentage points), its domestic market share has declined:
- Its share of domestic vehicle installations decreased from 43.42% to 41.7% in the third quarter, the lowest since 2020;
- Second-tier battery manufacturers (such as Zhongxin Innovation and Guoxuan High-Tech) have seen a 50% increase in shipments, taking away market share from CATL.
The key factor is cost-effectiveness: While CATL sells its lithium-ion batteries for 18,000 yuan per kilowatt-hour, Guoxuan High-Tech offers them for 15,300 yuan, saving nearly 30,000 yuan per vehicle. Since profits are lower in mid-to-low-end models, manufacturers prefer cheaper options. CATL can still maintain a strong position in the high-end market, but it is losing share in the mid-to-low-end segment.
3. Imbalance in Industry Profits
CATL's profit margins are exceptionally high:
- Its net profit for 2025 is expected to be 72.2 billion yuan, exceeding the combined profits of 11 listed vehicle manufacturers including BYD, SAIC, and Geely;
- In the first half of the year, seven second-tier battery manufacturers' combined net profit was only 32.87 billion yuan, compared to CATL's 30.485 billion yuan—more than ten times that of the others.
This imbalance is detrimental to the entire industry: if vehicle manufacturers cannot make a profit, they will have less money for research and development (new models, autonomous driving technology, etc.), which in turn reduces consumer demand for new energy vehicles and slows market growth to below 20%. In the long run, this will also affect CATL, as it won't be able to generate enough revenue even with its advanced technologies.
4. The Duality of CATL: A Technological Leader with Controversial Practices
Technologically, CATL remains a leader with innovative products like its ultra-fast charging batteries and Kirin batteries. However, its business practices are controversial:
- It enforces non-compete clauses to prevent employees from working for other battery manufacturers;
- It buys raw materials at high prices, squeezing the competitiveness of its competitors;
- Ren Zeping has criticized CATL for not behaving like a legitimate industry leader.
This situation is similar to Ctrip's past, where its dominance in the market hindered industry development and led to regulatory investigations. If CATL continues on this path, it may face policy risks.
5. The Future Trend: Diversification Is Inevitable
Diversifying supply chains is becoming a necessity, and the distribution of the battery market will change:
- Second-tier battery manufacturers will gain a foothold in the mid-to-low-end market;
- CATL needs to adapt and work with other companies to maintain its position in the high-end market. Otherwise, it may lose its dominance and become the target of criticism.
In summary, while CATL's technology is impressive, it must change its approach if it wants to sustain its success in a competitive industry. Otherwise, the entire industry could suffer, and so will CATL itself.