CATL stock plunges 36% as automakers diversify battery suppliers in de-CATLization trend
CATL, the world’s largest power battery maker, saw its stock fall to a year-to-date low of 305.48 yuan on September 16, losing over 700 billion yuan in market value since May. Automakers including Li Auto, Xiaomi, and Huawei are diversifying suppliers to second-tier makers like Sunwoda and CALB, a trend termed “de-CATLization.” Despite strong interim profits and a dominant 40.2% market share, CATL faces pressure from overcapacity, U.S. policy restrictions, and automaker efforts to cut costs and reduce supply chain risk.
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Cross-source coverage
Common ground
- CATL is a dominant player in the global battery market with strong technology and market share.
- Geopolitical pressures like US tariffs and bans are creating significant challenges for CATL.
- Automakers are diversifying away from CATL to other suppliers, reducing its market share.
- Government support has played a role in CATL's rise, similar to other countries' industrial policies.
Points of contention
- Whether CATL's dominance is due to genuine innovation or unfair state backing and market manipulation.
- Whether automaker diversification to other Chinese suppliers shows a healthy market or a lack of real alternatives.
- Whether CATL's licensing deals with Western companies prove its technological superiority or desperation to stay relevant.
- Whether solid-state batteries from competitors will soon overtake CATL's current technology.
Blind spots
- Both sides overlook the potential for new battery technologies from non-Chinese startups to disrupt the market.
- The debate ignores the environmental and labor costs of battery production in China.
- Neither side fully addresses how consumer demand for cheaper EVs might shape the market beyond geopolitics.
WorldAttention’s read
The debate shows deep disagreement on whether CATL's situation reflects market maturity or systemic dysfunction. The Eastern side sees normal evolution and resilience, while the Western side sees a state-rigged system cracking under pressure. Both agree that CATL is a powerful company facing real geopolitical headwinds, but they clash on whether its technology gap will keep it ahead or if competitors and political barriers will erode its lead. The blind spots include ignoring new tech disruptors, production costs, and consumer trends, which could shift the conversation beyond the current arguments.
Reporting timeline
CATL's Grip on Chinese EV Makers Loosens as Li Auto and Xiaomi Diversify Suppliers
Contemporary Amperex Technology Co. Ltd. (CATL), the dominant global electric vehicle battery maker, is facing a diversification push from key Chinese customers. Automakers including Li Auto and Xiaomi Group are designing their own battery cells and introducing new suppliers like Sunwoda Electronic, raising concerns of a 'de-CATLization' trend that has contributed to CATL's $100 billion market value loss. Morgan Stanley analyst Tim Hsiao said automakers seek to 'enhance bargaining power' amid component inflation, calling diversification 'a good idea.' The move reflects tensions in China's auto market, where price competition squeezes profits while CATL maintains pricing power. Hu Xijin, former Global Times editor, posted that 'CATL takes all the profits, squeezing downstream automakers.' Li Auto plans to supply self-developed batteries for all models after CATL delivery delays forced it to use Sunwoda. Xiaomi unveiled a new battery platform co-designed with CALB and Sunwoda. Hsiao noted that as autonomous driving develops, automakers focus on internal energy systems and battery technologies for business strategy and future development.
Read sourceCATL Faces 'De-CATLization' by Automakers While Expanding into Battery Swapping and Overseas Markets
This analysis from NetEase Finance examines the strategic shift by Chinese automakers to reduce reliance on battery giant CATL, a trend termed 'de-CATLization.' Automakers like Xiaomi and Li Auto are diversifying suppliers, developing in-house battery capabilities, and investing in second-tier manufacturers such as Sunwoda and CALB. The article notes that despite this 'siege,' CATL's financial performance remains strong, with record interim profits, a 46.7% domestic market share, and a booming energy storage business. CATL is countering by moving downstream into battery swapping (Choco-Swap), skateboard chassis (Panshi Chassis), and technology licensing (Ford partnership). The author, citing industry expert Yu Qingjiao, argues this is not a decline of CATL but a redrawing of power boundaries where automakers gain more choice while CATL extends into new business areas. The article also highlights risks for CATL, including recent monthly market share dips and quality issues faced by second-tier suppliers.
Read sourceCATL Faces Coordinated Pressure from US Policy, Domestic Automakers, and Battery Overcapacity
CATL, the global battery leader known as 'King Ning,' has seen its A-shares drop approximately 35% from a May high of 468.75 yuan to around 305 yuan, and its H-shares fall about 36% from 794.5 HKD in early June to roughly 504 HKD. The article attributes this decline not to poor interim results but to a three-pronged siege. First, domestic automakers including Tesla, XPeng, Li Auto, Xiaomi, and Geely are pursuing 'de-Ning-ification' by supporting second-tier battery suppliers or building their own production lines, which the market believes will weaken CATL's bargaining power and lower its long-term market share ceiling. Second, overcapacity in the battery industry is intensifying price wars, with second-tier manufacturers like CALB, Sunwoda, and Gotion High-Tech undercutting prices. Third, the U.S. market has become increasingly hostile: the NDAA will ban DoD purchases of CATL batteries from October 2027; Section 301 tariffs on non-automotive lithium batteries have risen to 25%, with a total effective rate up to 48.4%; IRS FEOC rules may jeopardize tax credits for energy storage projects using CATL materials; and vehicles using CATL batteries have lost eligibility for the $7,500 federal EV tax credit. Even U.S. factories cannot circumvent all restrictions unless wholly owned by American entities with CATL providing technology licensing, though this faces congressional pressure. The article suggests CATL's only viable strategies are expanding into emerging markets and leveraging technological advancements to stabilize pricing power.
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CATL Market Cap Plunges 800 Billion Yuan as Automakers Pursue De-CATLization
CATL, the world's largest power battery maker, saw its stock price fall sharply on September 15 and 16, 2026, with market capitalization dropping by approximately 800 billion yuan (36%) from its May peak. The decline is attributed by multiple institutions to a growing 'de-CATLization' trend among automakers, including Li Auto switching to Sunwoda cells, Xiaomi using CALB and Sunwoda, and AITO using Gotion High-Tech. CLSA noted investor concerns over potential customer shifts away from CATL. Despite CATL's strong first-half 2026 results (revenue up 54.8%, net profit up 41.98%) and a record share buyback announcement, capital market confidence has waned. Media commentator Hu Xijin suggested the de-CATLization narrative contains exaggeration but is affecting expectations. CATL's market share remains dominant at 40.2% in power batteries and 27.1% in energy storage.
Read sourceSecond-Tier Battery Stocks Rally as CATL Falls; Automakers Move to 'De-CATLize' Supply Chains
On September 16, Chinese second-tier battery stocks such as Xinwangda, CALB, Funeng Technology, Guoxuan High-Tech, and EVE Energy rallied collectively, while industry leader CATL (Contemporary Amperex Technology Co.) fell for a second consecutive day, briefly breaching the 300 yuan per share mark. Since its May 7 peak of 467.34 yuan, CATL's market value has evaporated by over 700 billion yuan. The divergence reflects a loosening of the long-standing supply chain structure in the power battery industry, as automakers increasingly pursue 'de-CATLization' strategies. Multiple automakers, including Huawei, Li Auto, and Xiaomi, have diversified battery suppliers or begun self-developing batteries. The article highlights the profit disparity between battery makers and automakers, with CATL's first-half net profit of 43.284 billion yuan far exceeding the combined profit of 15 major listed automakers. Analysts from Citi and JPMorgan maintain bullish ratings on CATL, viewing recent price declines as reflecting pessimistic expectations and noting that a recent asset transfer from Geely to CATL may signal industry consolidation rather than fragmentation.
Read sourceCATL Hits Year Low as Second-Tier Battery Makers Surge on EV Maker Supplier Shift
Chinese battery giant CATL's stock fell to a year-to-date low on September 16, closing at 305.48 yuan per share, down over a third from its 2025 high, as EV makers diversify suppliers. The same day, second-tier battery makers surged: Xinwangda rose 11.67% and CALB gained 6.63%. The divergence reflects a trend of EV makers 'de-Ningde-ization' to cut costs and reduce supply chain risks. CATL's batteries cost 10%+ more than rivals, with unit profit of 0.07 yuan/Wh versus 0.003-0.025 yuan/Wh for peers. Li Auto and Xiaomi recently announced new battery suppliers including Xinwangda and CALB. Analysts at Dongwu Securities note CATL's cost advantage of 0.05-0.06 yuan/Wh but say second-tier makers are gaining share. CLSA reports no evidence of systematic market share loss for CATL. Xinwangda chairman Wang Wei stated product quality is only 30% of success, with customer trust and lifecycle service accounting for 70%.
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