CATL, the world's largest battery maker, reported record revenue and profit for the first half of 2026, but its shares fell to a one-year low in September, according to the Chinese outlet Huxiu. The market's focus has shifted from CATL's own performance to the changing relationship between the battery giant and its automaker customers.
On September 16, CATL's A-share price briefly fell below 300 yuan (about $42) during trading, a one-year low. The decline comes as automakers such as Li Auto, Xpeng, Leapmotor and Seres diversify their battery supply and bring more battery development in-house.
Li Auto deepens battery ties with Sunwoda
Li Auto, which announced in September that it would gradually switch to self-developed batteries for future models, has already installed its own cells in the L8, L6 and i8 models. The company has also increased its stake in Sunwoda Power by 2.65 billion yuan (about $373 million), giving it an 11.17% stake after the deal closes.
Rather than completely abandoning CATL, Li Auto is taking control of cell research, pack design, battery management system (BMS) and thermal management, while leaving manufacturing to professional battery makers like Sunwoda and EVE Energy. This is a typical shift in the auto industry, where automakers want to control technology routes, performance targets, cost structures and iteration cycles, even if they do not own the factories.
CATL's rise from a startup to an industry pillar
CATL's founder, Robin Zeng, built the company on a philosophy of turning complex technical problems into stable, scalable industrial capabilities. In 2012, BMW sent CATL an 800-page German technical standard for the battery of its Zinoro 1E electric vehicle. CATL engineers spent two years working with BMW to master the entire process, from materials to production to certification, and built what was then Asia's largest battery testing center.
That early order was not large, but it gave CATL a lasting edge in standards, processes and engineering capability. As Mercedes-Benz, Volkswagen, BAIC and GWM joined its customer list, CATL became a key infrastructure player in the Chinese auto supply chain, shouldering the heavy R&D and manufacturing work that automakers were not yet ready to do themselves.
Now, as automakers mature, they are rethinking who should control battery technology. Li Auto has been developing battery cells since 2020 and has now moved from the lab to mass production. Xiaomi is also expanding its battery supplier options, and other automakers are increasing supply chain diversity.
This shift does not just change one supplier's order book; it changes the way automakers participate in the battery industry. For CATL, the challenge is no longer just about sales growth, but about maintaining its role as the industry's core technology provider as its customers start to build their own expertise.
