Behind CATL's 230 Million Daily Earnings, Are Car Manufacturers Shedding Bitter Tears?

Have you ever calculated this: For a new energy vehicle selling at 200,000, how much money can the car manufacturer keep in their pocket at the end?

The answer is possibly less than 10,000. And how much can the battery supplier take from these 200,000? More than 60,000. This isn't the most heartbreaking part. What truly makes the industry restless is that CATL earned 20.7 billion in the first quarter of this year, while the combined earnings of several top domestic car manufacturers are less than a fraction of that. Some joke that building cars nowadays isn't working for CATL, it's working for free for CATL. This sounds exaggerated, but looking at the freshly released Q1 report, most car manufacturers probably can't smile.

Car manufacturing profits all ran into the battery factory's pocket

CATL's numbers for Q1 2026 are truly eye-catching, achieving 129.131 billion yuan in revenue, with a net profit attributable to shareholders of the listed company at 20.738 billion yuan, a year-on-year increase of 48.52%, earning a net profit of 230 million yuan daily. What does this concept mean? Just look at the report cards submitted by car manufacturers in the first quarter to understand.

In Q1, BYD achieved revenue of 150.225 billion yuan, with net profit attributable to shareholders of 4.085 billion yuan. Geely Automotive's Q1 revenue was 83.776 billion yuan, with net profit attributable only 4.166 billion yuan. Great Wall Motor's situation is similar, Q1 revenue 45.109 billion yuan, but net profit attributable is only 945 million yuan. Looking at Changan Automobile, Q1 revenue is about 32.706 billion yuan, net profit attributable to shareholders is only 351 million yuan.

That is to say, BYD's profit in three months is less than 4.1 billion, Geely less than 4.2 billion, Great Wall less than 1 billion, and Changan is only 351 million. CATL's single-quarter net profit is five times that of BYD, more than twice that of Geely and Great Wall combined, and Changan is left behind by an order of magnitude.

Putting these numbers into perspective, a more intuitive comparison comes from the industry as a whole. Cui Dongshu, Secretary General of CPCA, previously gave data showing that in Q1 2026, China's automotive industry revenue was 2.4128 trillion yuan, profit was 78.4 billion yuan, down 18% year-on-year, sales profit margin further dropped to 3.2%. And a year ago, the profit margin for the entire domestic automotive industry in the first half of the year had already been compressed to around 4.8%. Now it's not only not improved but worse.

According to industry data, the proportion of power batteries in the total cost of a vehicle has reached 30% to 40%. If the price of lithium is high, this proportion could be even higher. Considering the fierce price war in the new energy vehicle market price today, with an average drop of 38,000 yuan, the profit space for car manufacturers has been compressed to the extreme.

This is why many consumers find that new energy vehicles of the same level have small price differences, but configurations are getting more competitive. Because the only thing that can make a difference is remaining in intelligence and cockpit experience, while the most valuable batteries, everyone basically gets goods from the same supplier. A single quarter's profit of a battery supplier is higher than the combined profit of several top car manufacturers. Is this really a healthy industry ecosystem?

A car holds batteries, but more importantly, others' profits

Zeng Qinghong of GAC Group said at the 2022 World Power Battery Conference that power battery costs account for 40% to 60% of the total vehicle cost. He joked saying "Am I not working for CATL now?". Fast forward nearly 4 years, this sentence remains a true portrayal of the entire industry.

When an ordinary car owner buys a car, they of course care most about range and reliability, and CATL's reputation in these two matters is indeed solid. But the greater the reputation, the harder it is for car manufacturers to break free from dependence. When a supplier accounts for over 43% of the power battery installation share in China, any car manufacturer wanting to switch supply plans has to consider whether consumers will approve. At the same time, battery companies have also unknowingly grasped pricing power and discourse power. Car manufacturers not only have to pay money but also queue up to pay prepayments to lock capacity. This kind of supply chain relationship was almost unimaginable in the traditional automobile industry era.

If we compare CATL with an engine-making enterprise, this contrast becomes clearer. Taking Weichai Power as an example, as the leading enterprise in the domestic engine field, 2025 full-year revenue was 231.8 billion yuan, net profit attributable to 10.9 billion yuan. While CATL's single-quarter net profit in 2026 alone exceeded 20 billion yuan, close to twice Weichai's full-year profit.

If Weichai represents the traditional internal combustion engine era still maintaining balance between vehicle manufacturers and parts suppliers, then in the power battery field, this balance has been completely broken. An owner might rarely ask what brand of engine is in the car when buying, but more and more people will actively check if this car uses CATL's battery. This is the power of consumer-end cognition, and this power in turn gives battery manufacturers greater bargaining confidence.

When battery manufacturers grasp the "steering wheel" of the industry, what do consumers feel?

For ordinary consumers, changes in the profit structure of the industry upstream will eventually fall on the reality of car selection and driving experience. The most direct manifestation is the "breaking out" of battery brands. A few years ago, few people would care which company's cells an electric vehicle used, but now many potential car buyers will actively check which company is the battery supplier of a certain car when browsing forums or watching car reviews, or even take "CATL" as an important car purchasing decision factor. This cognitive migration objectively gives CATL greater market appeal and makes car manufacturers more cautious in supplier selection.

From a more realistic driving scenario, this trend of upstream profit centralization is also affecting product definition and pricing strategies. Batteries account for over 30% of the total vehicle cost, meaning that for car manufacturers to launch an affordable model, they must make trade-offs in battery capacity. This is why there are some entry-level models in the market with shorter range but guaranteed battery brands. It's not that car manufacturers don't want to give big batteries, but the batteries themselves are too expensive. For budget-limited family users, this sometimes becomes a dilemma: if you want long range, you have to accept a higher car price; if you want it cheap, range and battery brand may have to compromise.

Another noteworthy phenomenon is that car manufacturers, in order to cope with battery cost pressure, are ganging up to build their own battery production lines. Whether it is a car manufacturer like BYD which already has battery self-supply capability, or other car manufacturers that have entered or are entering the field, they are all trying to master the battery business themselves. But whether this practice can fundamentally change the profit distribution pattern is still hard to say. After all, building a complete battery production line requires throwing billions in, technology accumulation and yield ramp-up also require a long cycle, not every car manufacturer can afford it. And in this process, car manufacturers' R&D expenses continue to rise, while terminal prices drop again and again, and profits are squeezed even thinner.

This phenomenon of profit inversion between battery manufacturers and car manufacturers is unlikely to reverse in the short term. CATL's domestic installation share has risen to 47.7% in Q1 2026, increasing by another 3.4 percentage points year-on-year, and market concentration is further improving. For consumers who want to buy new energy vehicles, this means that battery brands will remain a realistic proposition that must be faced when selecting cars for a long time. And when the most cost item of a car is in the hands of one supplier, the discourse power of the entire industrial chain is also transferring quietly. This transfer will eventually reflect in the choices of every car buyer in terms of price, configuration, driving experience, etc.

To put it simply, the growth of the domestic new energy vehicle market now is not as crazy as the previous two years, the growth rate of new car registration volume is slowing down, the penetration rate in first and second-tier cities is gradually hitting the ceiling, and the consumer power of third and fourth-tier markets needs time to cultivate. In this situation, whether car manufacturers or battery manufacturers, they have to fight for meat in the stock market, and price wars will inevitably get fiercer, and profits will naturally become thinner. Although CATL's Q1 net profit of 20.7 billion yuan is eye-catching, this is behind the squeezed survival space of small and medium battery enterprises and vehicle manufacturers. If we only look at this domestic cake, sooner or later everyone will be unable to fight for it.

So, going overseas is the solution. Europe, Southeast Asia, the Middle East, South America, the penetration rate of new energy vehicles in these places is still very low, and the market space is much larger than in China. CATL has already built factories in Germany and Hungary, and recently there are reports that they intend to further layout in Spain or Indonesia. On the car manufacturer side, BYD, SAIC, Geely, etc., are also accelerating the landing of overseas factories and sales networks. Selling products and technology to the global market, making the global market capacity larger, only then will the entire industrial chain have the opportunity to move from "rolling profits" to "sharing increments".

If Chinese new energy vehicles and batteries can stand firm overseas, scale effects will further reduce costs, and domestic car prices are expected to become more reasonable. At the same time, the competitive environment of the overseas market forces enterprises to improve product quality and service standards, and the ultimate beneficiary is still the ordinary car buyer. Instead of consuming each other in the domestic red ocean, why not work together to make the cake bigger. The pattern of battery manufacturers eating meat and car manufacturers drinking soup will not change in a day, but when everyone turns their eyes to a wider world, at least the meat in this pot of soup will be much more than now.