Is the "De-CATL-ification" Trend Feasible for Automakers?

[Lead: Automakers have called for "De-CATL-ification" for many years, but the reality is quite dramatic. CATL's status has not only not weakened, but has become even more solid. However, as battery cost pressures further impact whole vehicle profits, more and more automakers are introducing new battery suppliers or promoting self-developed projects to reduce battery costs, attempting to break the pattern of relying solely on CATL supply. Does this vigorous wave of supply chain adjustments mean that automakers will regain the initiative in the new energy industry chain?]

Cai Yan

On October 10, CATL and SERES Group signed a long-term strategic cooperation agreement in Chongqing. Both sides will comprehensively deepen strategic synergy around three core areas: expanding "factory-within-a-factory", building an ultra-fast charging ecosystem, and accelerating global layout.

Since the beginning of this year, automaker profits have generally declined, while CATL, which holds power batteries, continues to earn more and more. It is not only expanding business in the domestic market but frequently advancing overseas business. Recently, CATL's Debrecen factory in Hungary started cell pilot production, reached technical licensing cooperation with BME in Egypt, and promoted Indonesia industry chain projects, seeking new growth points in the overseas market under the condition of a relatively saturated domestic market.

In the first half of 2026, CATL's revenue was 276.917 billion CNY, a year-on-year growth of 54.80%; net profit was 43.284 billion CNY, a year-on-year growth of 41.98%, with its net profit being more than double the sum of 15 listed automakers. In recent years, CATL's revenue and net profit have climbed steadily. In 2022, revenue was 328.594 billion CNY, and net profit attributable to the parent company was 30.729 billion CNY; in 2025, CATL's revenue was 423.702 billion CNY, and net profit attributable to the parent company was 72.201 billion CNY.

CATL continuously makes a fortune from automakers. In 2022, Zeng Qinghong, chairman of GAC Group at the time, once said at the World Power Battery Conference: "As battery costs account for 40%~60% of whole vehicle costs, are we now working for CATL?" This became the beginning of automakers "De-CATL-ification", and many new energy automakers also began searching one after another for new battery suppliers.

However, in the past four years, CATL has not gotten thinner, actually got stronger. Some automakers "De-CATL-ification", while some automakers get closer to CATL. On the market share front, CATL's power battery core base remains solid, with the domestic passenger car installation share in the first half reaching 46.7%, capacity utilization rate about 95%, of which ternary power battery share reaches 75.2%.

Why Some Automakers Want to Escape CATL

However, CATL's status is not impregnable, which is traceable in the capital market. Its stock price reached a high of 467.35 CNY in May this year, while Q3 continued corrections, and September saw multiple phase lows. A-share cumulative maximum drawdown in Q3 was about 23%. The divergence between strong earnings growth and falling stock price is closely related to "De-CATL-ification" market sentiment. Automakers are advancing battery supply chain diversification, with some models introducing second and third suppliers.

The first core reason for automakers choosing "De-CATL-ification" is "Supplier margins exceed Automaker margins". In the past, OEMs controlled brands, channels, and users as the "leaders" in name of the entire industry chain. Now in profit distribution, core suppliers take the biggest chunk, with power batteries and intelligent driving becoming the two biggest headaches for automakers. Automakers face fierce competition in the existing market on one hand, while discovering on the other hand that profits are taken away by upstream core suppliers.

For automakers, introducing more second-tier suppliers is the simplest and most efficient money-saving method. Calculating at a price average 5% cheaper than CATL for secondary supplier power batteries, for a 100kWh battery with a cost of 80,000 CNY, the cost difference is around 4,000 CNY. For automakers who need to bear battery tax and have thin margins, this is indeed a better choice.

A very simple example: Since 2022, more and more new cars provide power batteries from different brands according to different versions. Taking Changan Deep Blue as an example, EREV short-range batteries still procure from CATL, while BEV long-range batteries are from CALB. Automakers such operations both ensure consumers value battery brand needs, and also consider new car promotion needs.

Automakers want to shake off single-point dependence on CATL for a second reason, to break free from the shackles of battery standardization black boxes and regain vehicle bottom-level definition rights.

Know that under new energy architecture, as core hardware, battery capacity size, shape, charge/discharge speed and other characteristics affect not only vehicle price costs, but also product positioning, iteration direction, whole vehicle hardware and software underlying algorithms, etc. Therefore, once core solutions are controlled by suppliers, automakers fall into the most passive state.

And what CATL delivers externally is a closed, fixed, non-customizable black box system. From cell discharge curves, C-rate thresholds, low-temperature output logic, to BMS battery management algorithms, full-domain thermal management calibration, safety protection mechanisms, all rules, data, algorithms are exclusively encapsulated and locked by CATL.

To put it plainly, when automakers do business with CATL, they are not purchasing customizable hardware, but a ready-made technical solution. How much battery underlying strategy can be adjusted, automakers do not have much say.

Taking BMS strategy adjustment as an example, automakers first submit requirements, battery factory assesses feasibility, after both parties business negotiations confirm, battery factory executes. After this string of processes, under conditions not fully controlled by automakers, facing the current involution automotive market, automakers often find themselves in a very awkward situation.

It is worth mentioning that since BMS algorithm is one of the most core business secrets of battery factories, algorithm strategy is the result of years of data accumulation and R&D investment of battery factories. Therefore, behind this inevitable reality, is the conflict between automakers requiring lower costs, more efficient definition rights, product pace and battery factory business secrets.

Therefore, if asking automakers "What is it they truly seek in 'De-CATL-ification'?" It is that, automakers do not want final product definition rights, technical iteration initiative to be held hostage by battery logic.

When top automakers all adopt CATL standardized battery solutions, all models' range, charging logic, safety, energy consumption baselines tend to homogenize, automakers' differentiation built with huge effort will be flattened by unified battery solutions.

Change perspective to give an example: If in fuel vehicle era, most car brands all adopt same set of engine + transmission, even fuel tank capacity size highly unified, automakers product definition would be hard to discuss. Therefore, automakers in 2026 promoting battery factory diversification, self-developed batteries, jointly customized cells, is not simply to drive down costs, bypass 4% battery tax. Facing current situation, some automakers willing to endure short-term consumer opinion, market losses, technical pains, also to regain vehicle underlying algorithms and product definition rights in their own hands.

"Making Batteries" Becomes the Ticket to World-Class Automakers

CPCA Secretary-General Cui Dongshu once judged "Automakers must make batteries, otherwise impossible to become world-class whole vehicle enterprises". This is why in 2026, brands with most actions on "De-CATL-ification" are often new force brands, while BYD, Great Wall, Geely and other traditional automakers with early layout in battery field relatively do not exist such pressure.

However, "calling slogans" is easy, true landing is very hard. First about automakers self-developed batteries, not to mention whether can save money, at least invested production capacity, losses, market reputation and technical ramp-up, market validation cycle, requires automakers to have sufficient determination confidence.

After all, power batteries involve materials science, electrochemistry, thermal management, manufacturing processes and other fields system engineering. CATL ability to reach PPB level (one part in a billion) safety standards, behind is result of countless R&D personnel and years of data accumulation.

Currently, whether Xiaomi, Xpeng, Li Auto, so-called self-developed batteries, actually target battery pack, BMS, thermal management, structural design and other battery system integration links, cell production technology undertaken by battery factory. And automakers need to invest time not low. Taking Li Auto as example, 2020 Fall finalized "cell + chip" dual self-development, to September 2026 only gradually launched self-developed batteries, more critical is during period Li Auto invested in Sunwoda, became second shareholder.

About so-called "De-CATL-ification" market opinion, this matter essence is not automakers abandoning battery factories, but subtle changes in supply-demand relationship. Previously was "no alternative to CATL", now automakers more value "efficiency, cost, controllability, definition rights" comprehensive factors, changed to "having CATL is good, but without also manage well".

Commentary

This round "De-CATL-ification" wave let CATL market value evaporate hundreds of billions. However, currently, CATL equity after October Golden Week finally has some rebound. CATL in battery technology, installation volume scale, safety factor, energy storage, battery swapping and other aspects still has advantages. Institutions observe whether CATL power batteries can stabilize, domestic market share changes, overseas business expansion and other situations. Automakers battery procurement diversification is trend, capable automakers self-developing batteries is trend. And facing whole vehicle factory supply chain diversification wave, CATL on one hand consolidate domestic power battery core base, on other hand accelerate Hungary, Egypt and other overseas base landing.

(This article is original "Heyan Yueche", without authorization, no reprinting)