Chinese state media warns 'de-CATLization' narrative threatens EV battery supply chain stability
Chinese state-affiliated media and the Economic Observer have pushed back against the "de-CATLization" narrative, arguing that automakers diversifying battery suppliers or developing in-house batteries are normal market behaviors, not a campaign against dominant battery maker CATL. The commentary warns that such rhetoric fuels harmful low-price competition that could compromise battery quality and safety. CATL's stock has fallen 35% from a May high, erasing 700 billion yuan in market value, amid market fears of reduced reliance on the company.
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CATL Needs Competitors, Says Economic Observer Editorial on Automaker-Supplier Tensions
An editorial from the Economic Observer, republished by Stockstar, argues that while automakers diversifying battery suppliers is normal business, the narrative of 'de-CATL-ization' is premature. It notes CATL holds 40% global market share and its 2026 first-half net profit of 43.284 billion yuan far exceeds the combined profit of 14 listed automakers. The editorial defends CATL's high profits as a result of high R&D investment and a positive business model, contrasting it with the auto industry's low 1.5% average profit margin. However, it warns CATL cannot be complacent, as high margins attract competitors and automakers have a natural incentive to reduce dependency. It highlights the need for a healthier 'vehicle-supplier relationship' in the new energy era, where core components like batteries are controlled by suppliers rather than automakers, unlike in the traditional fuel vehicle industry. The editorial concludes that CATL needs competitors to ensure a sustainable industrial ecosystem.
Read sourceChina's MIIT-affiliated media warns against 'de-Ningde-era' narrative in EV battery supply chain
On September 22, China's Ministry of Industry and Information Technology (MIIT)-affiliated China Industry and Information Technology News published a commentary titled 'The 'De-Ningde-era' Argument Must Be Avoided,' pushing back against market speculation about automakers reducing reliance on battery giant CATL (Contemporary Amperex Technology Co. Ltd., often referred to as 'Ningde'). The article argues that automakers adding suppliers or developing in-house batteries are normal business practices and should not be framed as a confrontation between vehicle manufacturers and battery producers. It warns that while cost reduction is important, it must not compromise battery quality and safety, and cautions against disorderly low-price competition spreading to upstream battery materials. The commentary follows earlier directives from MIIT and three other ministries aimed at regulating competition in the power and energy storage battery sectors. The piece reflects official concern over maintaining industrial stability amid rapid EV market growth and supply chain diversification.
Read sourceChinese State Media Warns Against 'De-Ningde-era' Narrative in EV Battery Supply Chain
An article published by China's Ministry of Industry and Information Technology (MIIT)-affiliated media, reposted on East Money, argues that the 'de-Ningde-era' (removing CATL) narrative in the electric vehicle (EV) battery supply chain is misguided. It asserts that supply chain adjustments and automakers' self-research are normal market behaviors, not a trend to eliminate the dominant battery maker CATL. The commentary warns that such rhetoric fuels low-price competition at the expense of quality and safety, and risks low-level redundant construction. It emphasizes that China's EV industry success relies on a collaborative ecosystem, not weakening leading firms. The article calls for rational competition focused on technology and quality, not marketing concepts, and warns against turning supply chain partners into adversaries. It advocates for professional division of labor, citing examples like Bosch in Germany and Denso in Japan, and stresses that true innovation does not require blurring industry boundaries. The piece concludes that the industry's priority should be fostering more globally competitive firms, not zero-sum narratives.
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Chinese Commentary Warns Against 'De-CATL' Rhetoric in EV Battery Supply Chain
A commentary published on East Money News, attributed to China Industrial News, argues that the narrative of 'de-CATLization' (removing CATL from supply chains) in China's electric vehicle industry is misguided and harmful. The article states that normal market behaviors such as supplier diversification and in-house battery research by automakers are being wrongly framed as a campaign against the dominant battery maker CATL. It emphasizes that China's new energy vehicle success stems from the collective growth of the entire supply chain, not any single company. The commentary warns that such rhetoric fuels a dangerous trend of low-price competition that sacrifices quality and safety. It calls for rational competition based on technology and quality, not marketing slogans, and cautions against low-level redundant construction. The piece argues that China's auto industry needs more globally competitive companies, not a zero-sum game of weakening leaders. It concludes that the goal should be industry-wide improvement, not pulling down leaders, and that supply chain collaboration should not be turned into confrontation.
Read sourceCATL shares fall 35% as automakers diversify battery suppliers, analysts say
CATL (Contemporary Amperex Technology Co. Ltd.), the largest battery maker on China's ChiNext board, has seen its stock price drop 35% from a May high of 467.35 yuan to around 299 yuan, erasing 700 billion yuan in market value. This decline contrasts with strong first-half earnings, where revenue and net profit grew 54.8% and 41.98% year-on-year respectively. Analysts attribute the sell-off to market fears of 'de-Ninghua,' a trend where automakers are moving away from CATL as a sole supplier to reduce costs and increase bargaining power. Some automakers are adopting multiple suppliers or developing in-house batteries. Despite this, CATL retains competitive advantages in capacity utilization (around 95% in most years), global market share, and scale. The article argues that 'de-Ninghua' is partial and not as severe as feared, as CATL has time to strengthen its position through expanding energy storage revenue and overseas markets.
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