On September 15, battery giant CATL saw its shares tumble more than 6% in afternoon trading, with A-share prices closing at 316.36 yuan, marking a 6.16% single-day drop and hitting a one-year low. H-shares also fell approximately 6%, pushing the combined A+H market value below 1.5 trillion yuan. From its historic peak on May 7, 2026, the stock has now declined over 32%.

This downward trajectory presents a stark contrast to the company's financial performance. In the first half of the year, CATL reported revenue of 276.9 billion yuan, a 54.8% year-on-year increase, while net profit attributable to shareholders reached 43.284 billion yuan, up 42%, translating to approximately 240 million yuan in daily earnings. On paper, it remains the industry's most profitable player. Yet, the market's verdict points to a different narrative—automaker clients are increasingly seeking alternative battery sources.

The sentiment that automakers no longer want to work for battery manufacturers was publicly voiced by GAC chairman Zeng Qinghong in 2022, then perceived as a jest. Today, it has become a financial reality. In the first half of this year, the combined net profits of 15 major listed automakers totaled 21.048 billion yuan, less than half of CATL's alone. While the automotive industry's profit margin for the January-to-July period dwindled to just 3.6%, power battery companies maintained double-digit gross margins, creating an inverted profit structure across the new energy supply chain.

Starting in September, automakers have moved with remarkable intensity. On September 4, Li Auto invested 2.65 billion yuan to acquire an 11.17% stake in Sunwoda Power, becoming its second-largest shareholder. That same week, Li Auto announced plans to roll out self-developed batteries across all its models, with the new L8 switching to Sunwoda's cells. Xiaomi, meanwhile, introduced its Longjia battery, adding CALB and Sunwoda Power to its supplier list, while its new Pengcheng N70 and N90 models have dropped the CATL batteries used in the SU7 and YU7. AITO has brought in CALB and Gotion High-Tech as secondary suppliers. Leapmotor has gone further, co-building a battery base with CALB in Jinhua. NIO has established a battery R&D facility in Shanghai, and XPeng is betting on CALB and EVE Energy. BYD's fully vertically integrated approach via FinDreams Battery has become a template many automakers now emulate.

Examining these partnerships closely, automakers are targeting far more than cost-effective cells—they are after design authority. Xiaomi, for instance, has embedded quality teams within its partners' factories, establishing over 8,000 inspection points that extend to raw materials from first- and second-tier suppliers, with production data archived for 15 years. Li Auto controls product definition, cell chemistry, and BMS systems, leaving Sunwoda merely responsible for manufacturing. Previously, automakers purchased batteries as finished products, with little say over materials or manufacturing processes. Now, they are taking charge of electrochemical systems, voltage platforms, and thermal management themselves.

The underlying anxiety extends beyond costs. Batteries are no longer ordinary components—they dictate range, fast-charging capabilities, safety, energy consumption, and even chassis design. Yet CATL often delivers what amounts to a black box, retaining control over discharge curves, charging strategies, and thermal management calibration. As automakers sell more vehicles, they feel they are nurturing customers for someone else's benefit. When batteries account for 30-40% or even half of a vehicle's cost, relinquishing control over such a critical element is a risk few can afford to sleep on.

However, CATL's moat remains intact. According to South Korea's SNE Research, its global power battery installation share approached 40% in the first half of this year, while domestic share rebounded to 47.72%—the first upward tick in three years. The company has also announced a share buyback plan ranging from 20 billion to 40 billion yuan. Analysts at CLSA and Huatai Securities maintain positive outlooks, arguing that the recent correction already reflects pessimistic expectations, and that U.S. energy storage shipment fluctuations are more a timing issue than a demand weakness.

Yet dismissing automaker self-development as a mere profit grab underestimates the shift. Cui Dongshu, secretary-general of the China Passenger Car Association, has noted that automakers venturing into battery production aim to regain control over vehicle competitiveness, while long-term industry health still depends on specialized division of labor. In practice, some automakers, after bringing in multiple suppliers, have grappled with quality control issues arising from battery mix-matching—a topic of ongoing industry debate. CATL's delivery scale, consistency, and safety calibration are hard-won strengths built over years, while newcomers must build comprehensive management systems beyond just production capacity.

Industry observers point out that in the second half of the year, many regions have largely suspended acceptance of new power and storage battery capacity project filings. Industry statistics show that planned expansion of energy storage cell capacity exceeds 800GWh this year, with year-end built capacity estimated at 1.2 to 1.5TWh and total planned capacity approaching 2TWh—far exceeding global real demand. The industry leader continues to generate profits, yet its customers are learning to build their own, while a capacity glut looms. CATL's current decline reflects the market's reassessment of the premium it once commanded.