China's battery giant CATL is facing twin challenges: automakers are reducing their dependence on its batteries, and a national push for solid-state technology could reshape the competitive landscape, according to a report from Hupu.
The report, published in late September, notes that Li Auto invested 2.65 billion yuan (about $373 million) to become the second-largest shareholder of Sunwoda Power, and that its next-generation MEGA will use self-developed 5C ternary batteries. Xpeng's CEO He Xiaopeng said the company will handle battery packs, BMS, and system definition in-house. Xiaomi, Nio, GAC, and SAIC are also diversifying their battery suppliers, a trend that has weighed on CATL's share price, which fell more than 35% from its May high to 291.99 yuan (about $41) by September 28.
However, the report argues that the bigger challenge is the government's "15th Five-Year Plan for New Battery Industry Development," issued by seven ministries on September 28. The plan targets initial large-scale application of all-solid-state batteries by 2030, along with long-life lithium batteries with 15,000 cycles and defect rates at the parts-per-billion level. It also supports the development of sodium and flow batteries and encourages consolidation among leading companies.
CATL has dominated the global power battery market since 2017, with a 40.2% share from January to May this year. Its first-half revenue reached 276.9 billion yuan (about $39 billion), up 54.8% year-on-year, and net profit was 43.3 billion yuan (about $6.1 billion). The company's technological leadership, including CTP (cell-to-pack) technology and the Qilin and Shenxing battery lines, has been built on liquid electrolyte chemistry.
Solid-state race
All-solid-state batteries replace the liquid electrolyte with a solid one, offering higher energy density (400-500 Wh/kg versus about 300 Wh/kg for liquid) and improved safety. But they face technical hurdles, such as interface stability and manufacturing costs. Nissan's prototype battery pack could cost over 100 million yen (about 4.3 million yuan) per vehicle, according to internal estimates cited in the report.
China has three groups pursuing solid-state technology: battery giants like CATL, BYD, Gotion High-tech, and EVE Energy; automakers like GAC, SAIC, and Chery; and startups like WeLion, QingTao, and Ganfeng Lithium. In August, a sulfide-based all-solid-state battery pack developed by Qingdao Zhongke Yuanben was reportedly installed in a test vehicle, the first such public demonstration in China.
CATL's chief scientist Wu Kai said the company's all-solid-state technology is at level 4 on a 1-9 maturity scale, targeting level 7-8 and small-batch production by 2027. CEO Robin Zeng has been cautious, saying that large-scale commercialization by 2030 is "very unlikely" if it means equipping a million vehicles. He emphasized that technological breakthroughs are event-driven, not time-driven.
CATL is focusing on sulfide-based all-solid-state batteries, using condensed matter batteries as a transitional step, and continues to iterate its liquid battery technology. The report concludes that solid-state batteries represent a fresh start, not an extension of the current game, and CATL must prove its leadership anew.
