MIIT-affiliated media warns against 'de-CATL' rhetoric, cautions on low-price competition

Source: China Industry News

Introduction

In recent months, the term "De-Ningde-ization" has been repeatedly hyped within the new energy vehicle (NEV) industry, evolving into a media spectacle. Adjusting supply chains, adding suppliers, and investing in in-house R&D are normal market behaviors for automakers. Yet, these actions are being continuously packaged as "De-Ningde-ization" and even portrayed as a confrontation between vehicle manufacturers and power battery companies.

Behind the noise, the real topic for discussion is not "who will replace whom?" but rather, as China's NEV industry enters a phase of high-quality development, what kind of industrial competition is truly needed.

I. The Foundation of China's NEV Success: A Collaborative Industrial Chain

China's NEV industry has reached its current position not through the solo efforts of any single company, but through the collective growth of an entire industrial chain.

Over the past decade, Chinese companies have built global competitiveness across multiple critical areas: from power batteries, electric motors, and electronic controls, to advanced driver-assistance systems, automotive chips, and vehicle manufacturing. This industrial ecosystem was hard-won.

Notably, during the era of traditional fuel vehicles, China's auto industry long suffered from a lack of competitiveness in core components. Today, a number of Chinese component suppliers are moving to the forefront of the global supply chain. This represents a truly landmark shift for China's automotive industry.

According to Automotive News' 2026 ranking of the world's top 100 automotive parts suppliers:

• CATL ranked third globally.
• The number of Chinese companies on the list reached 17, surpassing Japan to claim the second-highest national total for the first time.

However, in terms of the total revenue of listed companies, China still lags significantly behind traditional automotive powerhouses like Germany and Japan. This indicates that China's automotive supply chain is not "too strong"; rather, it has finally established advantages in some key areas while still having substantial room for overall improvement.

Against this backdrop, a media environment that readily advocates for "de-something-ization," artificially pitting leading domestic companies against the rest of the supply chain, does not align with the current development stage of China's auto industry. What a mature industry truly needs is not "cutting down the peaks to fill the valleys" or "weakening whoever is ahead," but rather fostering the growth of more excellent companies while allowing those that have already achieved global competitiveness to continue advancing.

II. The Hidden Risk: Low-Price Competition Spreading Upstream

A more concerning trend underlying the "De-Ningde-ization" narrative is the spread of low-price competition to the upstream segments of the industrial chain.

In recent years, competition in the NEV industry has intensified. Prices, features, and time-to-market are constantly being pushed to new limits. This competition has driven technological progress and accelerated the adoption of NEVs.

However, when competition crosses a certain boundary, it can take a destructive turn. This happens when:

• Cost reduction shifts from improving technical efficiency to simply driving down procurement prices.
• Supply chain choices are increasingly driven by short-term cost considerations rather than technology, quality, and long-term reliability.
• Some companies, seeking to create market buzz, package normal supplier relationships as "breaking free," "replacing," or "removing" a dominant player.

This dynamic risks shifting industrial competition from a focus on technology and quality to a focus on price and marketing rhetoric.

This is especially critical for power batteries.

A battery is not a standard commodity component. It directly impacts a vehicle's safety, reliability, lifespan, and user experience. Research from NielsenIQ indicates that a majority of consumers surveyed globally can already perceive differences in technology and quality between battery brands, and they consider the battery a key factor in their vehicle purchase decision.

This means that while reducing costs across the supply chain is important, low price cannot be equated with low total cost, and quality must never be sacrificed for a lower price. Today, China's NEV market has entered an era of multi-million annual sales. Behind every battery and every car are not just a few percentage points on a corporate cost sheet, but the safety and trust of millions of consumers.

Price can be competed on, and efficiency can be competed on, but safety and quality cannot become the price of competition.

III. A Rational View on Automakers' In-House Battery Development

Automakers' moves to develop their own batteries should also be viewed rationally.

There is nothing inherently wrong with vehicle manufacturers extending their reach upstream in the supply chain. It is a normal market behavior for automakers to:

• Strengthen battery system R&D to create differentiated product capabilities.
• Participate in cell definition to improve synergy between the vehicle and battery.
• Invest in multiple suppliers or even battery companies to enhance supply chain resilience.

The real question for discussion is not "can automakers develop their own batteries?" but "what constitutes genuine in-house development?"

Power batteries are a highly complex industrial chain. From material systems and electrochemical design to cell engineering, manufacturing processes, battery systems, safety validation, and mass production, each stage presents completely different technical barriers.

In reality, what some companies call "in-house battery development" is often focused on battery pack design, system integration, BMS management, or product definition. This is a different concept from truly completing cell R&D and achieving large-scale, stable manufacturing. Currently, many automakers' related efforts have not yet penetrated the core stages of cell manufacturing.

Companies are free to choose different technical routes and supply chain models. However, market claims should align with actual capabilities. Labeling joint development as fully independent R&D, packaging supplier manufacturing as in-house production, or turning supply chain partnerships into marketing slogans not only misleads consumers but also undermines an innovation environment that should respect expertise and technology.

True independent innovation does not need to prove itself by blurring the lines of industrial specialization.

IV. Avoiding the Pitfall of "Low-Level Redundant Construction"

China's new energy industry should also avoid repeating the mistakes of "low-level redundant construction" seen in other sectors.

After a period of rapid growth, industries often face similar problems: seeing high profits in one segment, companies rush in; seeing a popular business model, they replicate it en masse. The result is rapid capacity expansion, highly homogenized products, and companies forced to compete by continuously slashing prices. This pattern is not unfamiliar in the development of several emerging industries.

The power battery industry itself is highly intensive in capital, technology, talent, and manufacturing. Large-scale manufacturing, in particular, requires long-term process accumulation and quality control. It is not something that naturally creates industrial competitiveness simply by building a factory and buying equipment.

If every automaker pursues a "large and complete" vertical integration, if every link is subject to duplicate investment, and if every capability must be developed internally, it may appear to increase autonomy but could actually lead to new rounds of low-level redundant construction and resource misallocation.

The true competitiveness of modern industry is built on specialized division of labor.

The German auto industry has Bosch and Continental; the Japanese auto industry has Denso and Aisin. Strong vehicle manufacturers and strong component suppliers have coexisted for a long time. The fact that component suppliers became stronger did not lead to calls for "De-Bosch-ization" or "De-Denso-ization."

The same principle applies to China's auto industry. We certainly need more power battery companies to grow, more competition among technical routes, and automakers to enhance their own technical capabilities. However, "diversification" is not the same as "de-leading-company-ization," and "independent innovation" is not the same as "doing everything yourself."

V. The Next Stage of Competition: Quality, Trust, and Global Competitiveness

Today, competition in China's NEV industry has entered a new phase.

The first half of the journey addressed questions like "does it exist?", "is it affordable?", and "how far can it go?" The next stage must truly answer: "Is it safe?", "Is it reliable?", and "Can it win the long-term trust of global consumers?"

The metrics of competition should change accordingly.

If the industry remains fixated on extreme price wars, using supply chain price suppression as the primary cost-reduction method; if it packages manufacturing capabilities that require long-term cultivation as short-term marketing labels; if it deliberately portrays supply chain partners as competitors just to create buzz—the ultimate damage will not be to any single company, but to the entire ecosystem of China's NEV industry.

Companies like CATL, BYD, CALB, EVE Energy, and automakers alike should all be subject to consumer choice in a fully competitive market.

• Competition drives innovation.
• A diversified supply chain enhances industrial resilience.

At the same time, a basic industry consensus must be formed:

• The goal of competition is to elevate China's NEV industry as a whole, not to pull down the leaders.
• The direction of cost reduction should be technological progress and efficiency improvement, not quality degradation.
• The value of independent innovation lies in genuinely creating new capabilities, not in manufacturing new concepts.

From a longer-term perspective, what China's auto industry most lacks today is not more slogans about "de-something-ization," but more companies with true global competitiveness.

For decades, China's auto industry has aspired to create its own world-class vehicle brands, world-class component suppliers, and world-class technology companies. Now that such companies are beginning to emerge, we need to think more about how to use full competition to make them more numerous and stronger, rather than falling into a zero-sum narrative of one rising at the expense of another.

Industrial competition can be fierce. Technical routes can differ. Supply chains can be diversified.

But one bottom line cannot be blurred: Low-quality involution must not be allowed to damage the hard-won competitive advantages of China's new energy industry. Marketing concepts must not be allowed to replace genuine technological innovation. And most importantly, supply chain collaboration must not be artificially turned into supply chain confrontation.