Chinese EV makers Xiaomi, Li Auto, XPeng shift to self-developed batteries for cost and control
A growing number of Chinese electric vehicle makers, including Xiaomi, Li Auto, Leapmotor, and XPeng, are moving from purchasing standardized batteries to defining and controlling battery technology. This shift, driven by cost pressures (batteries account for 30-40% of vehicle costs) and a desire for supply chain security, involves partnerships with cell manufacturers like CALB and Sunwoda while automakers retain system-level control. The trend is enabled by technology parity among leading battery suppliers.
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Chinese EV Makers Shift Strategy to Gain Control Over Battery Development and Supply
A growing number of Chinese electric vehicle (EV) makers, including Xiaomi, Li Auto, and XPeng, are moving to deepen their involvement in battery development, manufacturing, and supply, according to an analysis by Tencent Stock. The article reports that on September 4, Xiaomi announced a strategic partnership with Sunwoda and CALB for its 'Dragon Armor Battery,' while Li Auto invested 2.65 billion yuan to become the second-largest shareholder of Sunwoda. A September 16 report on the Li i9 indicated initial use of CATL batteries, with a planned switch to Li Auto's self-developed batteries. On September 17, XPeng CEO He Xiaopeng stated the company will begin making its own batteries, though cells will still be supplied by vendors. The analysis attributes this trend to three factors: cost control (batteries account for 30-40% of vehicle cost), product differentiation, and supply chain security. It notes that over 10 Chinese automakers have announced self-developed battery plans by 2024. The article cites an unnamed industry source telling commentator Hu Xijin that 'de-CATL-ization' is a trend because CATL takes too much profit. The analysis concludes that this shift represents a redefinition of industry boundaries, with automakers taking on more responsibility for battery performance and safety, while battery manufacturers continue to focus on cell R&D and manufacturing.
Read sourceChinese EV Makers Shift to Self-Developed Batteries for Cost, Control, and Responsibility
A growing number of Chinese electric vehicle (EV) makers, including Xiaomi, Li Auto, Leapmotor, and XPeng, are moving to self-develop or co-develop their own batteries, marking a shift from a 'supplier black box' to a 'responsibility white box' model. The article, published by Securities Times, analyzes the strategic motivations behind this trend. Key drivers include reducing battery costs (which account for 30-40% of vehicle cost), securing supply amid tight capacity, and taking full responsibility for battery safety and performance. Executives like Li Auto's Li Xiang and XPeng's He Xiaopeng are quoted emphasizing that the goal is not to replace suppliers but to better define and guarantee the user experience. The article notes that this shift is enabled by a 'technology parity' among major battery cell manufacturers, meaning performance differences now depend more on vehicle integration. The new model involves deeper collaboration with battery partners like CALB and Sunwoda, with automakers focusing on system-level management (BMS, thermal safety) while partners handle cell chemistry and production. Automakers are also offering enhanced warranties, such as Xiaomi's 'Dragon Armor Battery' plan that guarantees replacement of the entire vehicle if the battery causes a fire.
Read sourceChinese EV Makers Shift from Battery Buyers to Battery Definers, Taking Full Responsibility
A growing number of Chinese electric vehicle (EV) makers, including Xiaomi, Li Auto, Leapmotor, and XPeng, are moving to self-develop batteries, marking a shift from purchasing standardized cells to defining and controlling battery technology. The article, published by Securities Times via Tencent Stock, reports that this trend is driven by cost pressures—batteries account for 30-40% of vehicle cost—and a desire to break free from supplier constraints. However, the deeper motivation is a restructuring of accountability: by moving from a 'black box' supplier model to a 'white box' in-house model, automakers aim to take full responsibility for battery safety and performance. Executives from Li Auto and Xiaomi have publicly committed to comprehensive warranty and safety guarantees. The article notes that this shift is enabled by 'technology parity' among leading battery manufacturers, meaning no single supplier holds a decisive technological advantage. Automakers are not necessarily building their own factories but are partnering with cell makers like CALB and Sunwoda through joint ventures and OEM arrangements, focusing on system-level integration, battery management, and thermal safety.
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Chinese Automakers Shift from Battery Buyers to Battery Definers, Taking Full Responsibility
Chinese electric vehicle (EV) makers, including Xiaomi, Li Auto, Neta, and XPeng, are increasingly developing their own battery systems, moving from a traditional 'black box' supplier model to a 'white box' approach where they define battery specifications and assume full responsibility for quality and safety. The article, citing industry executives and data, argues this shift is driven by three factors: cost reduction (batteries account for 30-40% of EV costs, while automaker profit margins fell to 1.5% in early 2026), supply chain security, and the desire to offer clearer consumer guarantees. Li Auto's Ma Donghui stated the company will take full responsibility for the entire product, regardless of which component fails. Xiaomi launched a 'Long Armor Battery' with a lifetime guarantee against self-ignition and collision-induced fires. The analysis notes that this trend is enabled by 'technology parity' among leading battery cell manufacturers, meaning automakers can now source from multiple suppliers (e.g., CALB, Sunwoda) without significant performance trade-offs. The article concludes that automakers are not replacing battery makers but reshaping the supply chain through partnerships, joint ventures, and contract manufacturing, focusing on system-level integration (BMS, thermal management) while leveraging suppliers' cell expertise.
Read sourceChinese EV Makers Shift to In-House Battery Development for Cost and Quality Control
A growing number of Chinese electric vehicle (EV) makers, including Xiaomi, Li Auto, Leapmotor, and XPeng, are moving to develop their own batteries, marking a shift from purchasing standardized cells to defining and controlling battery technology. The article, citing a Securities Times report, explains that this trend is driven by the need to reduce costs—batteries account for 30-40% of EV costs—and to take full responsibility for safety and quality. Under the traditional 'black box' model, liability for battery failures was split between suppliers and automakers, leading to disputes. Now, with in-house development, automakers aim for a 'white box' approach, managing the entire supply chain and offering comprehensive warranties. For example, Xiaomi's 'Dragon Armor Battery' includes a lifetime guarantee against fire and explosion. The article notes that this does not mean automakers will manufacture cells themselves; instead, they partner with established battery makers like CALB and Sunwoda for cell production while retaining system-level control. The shift is enabled by the maturity of battery technology, where major suppliers have achieved comparable quality, reducing switching costs.
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