The battle lines in China's power-battery market are being redrawn in 2026. An analysis carried by Huxiu argues that the sector's second tier is beginning to fight back against CATL, not with lower prices alone but with a direct cell supply model that bypasses conventional packaged-battery sales. The data behind that claim, drawn from first-half earnings, show the challengers are growing quickly—just not yet at CATL's expense.
Frustration with CATL's dominance was on display at the 2026 China Power Battery Conference, where Chery chairman Yin Tongyue said the industry had promised risk-sharing and benefit-sharing but battery makers were now enjoying more of the results. GAC chairman Zeng Qinghong made a similar complaint four years ago, when he described automakers as effectively working for battery companies. Huxiu's report notes that CATL's profit in the first half was larger than the combined profit of 15 A-share listed carmakers, and that Chinese companies account for five of the world's top-10 battery makers by market share.
What the H1 numbers show
Excluding CATL, the four leading second-tier companies—CALB, Gotion High-tech, EVE Energy and Sunwoda—increased combined revenue by 47.8 billion yuan (about $6.73 billion) in the first half, close to half of CATL's own increase. But the analysis splits that growth carefully. Of the 47.8 billion yuan, only 25.36 billion yuan (about $3.57 billion), or 53 percent, came from power batteries. Energy storage, consumer batteries and other businesses supplied the rest. Measured against CATL's 60.52 billion-yuan (about $8.52 billion) jump in power-battery revenue, the four companies' combined growth was 41.9 percent, down from 46.7 percent at the end of 2025.
The composition varied sharply. CALB's 10.67 billion-yuan increase included 4.82 billion yuan from storage, leaving 5.84 billion yuan from power batteries including commercial vehicles. EVE Energy added 17.5 billion yuan, but only 4.53 billion yuan came from power batteries; storage contributed 4.8 billion yuan and consumer batteries 1.33 billion yuan. Sunwoda's 11.1 billion-yuan gain included 6.53 billion yuan from EV batteries. Gotion, with the smallest increase, derived almost all of its growth from power batteries.
Why CATL is still holding the line
The article gives CATL two structural advantages. Its upstream mine footprint—from Indonesia to Yichun in Jiangxi province, plus a stake in CMOC—has pushed its self-sufficiency in key metals to around 35 percent, against an industry average of 10 to 15 percent. Dongwu Securities estimates the own-mine position alone cuts costs by 10 to 15 percent. In consumers' minds, the report says, the battery market has only two names: BYD's in-house FinDreams and CATL. Everyone else is "other."
Rather than converting those advantages into fatter margins, CATL appears to be trading price for share. Its first-half power-battery gross margin fell 321 basis points, narrowing the gap with Sunwoda and CALB. The article reads this as deliberate price discipline intended to keep hold of customers while avoiding accusations of monopoly or squeezing suppliers. The inventory numbers tell a similar story: CATL's stock levels and net inventory growth were far higher than the four challengers' combined figures, which the report interprets as intentional stock-building to keep its share gains from looking too aggressive.
Capacity data point in the same direction. CATL ran at 94.86 percent utilisation in the first half, producing 498 GWh from 525 GWh of capacity, while the second-tier four operated between 65 and 86 percent. Their combined capacity is now close to CATL's: roughly 130 GWh at Gotion, about 200 GWh at EVE Energy by the end of 2026, and around 120 GWh each at Sunwoda and CALB from current deployments.
The broader market is slowing, but battery demand per car is rising. China Association of Automobile Manufacturers data cited by the article show new-energy vehicle output and sales grew 6.7 percent and 7.3 percent year on year in the first half, well below the year-earlier pace as subsidies were phased down. Average installed battery capacity per vehicle rose from 46-47 kWh in 2022-2024 to 53.1 kWh in 2025 and 67.8 kWh in January-April 2026, up 33.8 percent year on year. The battery value in two new 2026 cars, the report notes, would have been enough for three cars in 2024. That industry tailwind is why the second-tier companies still see a window to attack—by selling cells directly to automakers and converting the industry's expansion into durable share.
