On September 15, the largest stock on the ChiNext board, Contemporary Amperex Technology Co., Limited (CATL) (SZSE: 300750) (H-share: CATL (HKG: 03750)), tumbled from the open, extending losses into the afternoon. The stock closed down 6.16% at 316.36 yuan, marking a fresh one-year low, while its Hong Kong-listed shares also sank 6.01% to 516 HKD, its lowest since March 2026. The combined A+H market capitalization has now slipped below 1.5 trillion yuan, with a single-day loss of roughly 91.4 billion yuan in A-share market value alone.

Given that CATL accounts for about 16% of the ChiNext Index weight, the board briefly recovered to positive territory in early trading before being dragged down to close 1.15% lower. Since peaking at 468.75 yuan on May 7, the stock has pulled back more than 32% over four months, with market cap shrinking by roughly 700 billion yuan from its peak.

Why a Stellar Earnings Report Couldn't Hold the Share Price

The most counterintuitive aspect of this decline is that CATL's fundamentals show no signs of cracking. In the first half of 2026, the company generated 276.92 billion yuan in revenue, up 54.80% year-over-year, and net profit attributable to shareholders of 43.28 billion yuan, up 41.98% — equivalent to earning about 240 million yuan per day. Power battery revenue reached 192.13 billion yuan, up 46.02%, while energy storage battery revenue surged 87.54% to 53.26 billion yuan. Globally, CATL installed 242.7 GWh of power batteries, holding a 39.9% market share and ranking first worldwide for the ninth consecutive year.

Domestically, its share of passenger vehicle installations climbed 5.6 percentage points to 46.7%, and its global market share in ternary lithium batteries exceeds 75%. Yet a company earning 43.2 billion yuan in six months finds the market no longer wants it. The problem is not how much it earns today, but how much it can earn in the future.

The Trigger: Automakers Are Collectively Moving Away from CATL

The catalyst behind this sell-off is the accelerated defection of core customers. Li Auto, which was CATL's largest client in February 2026, switched its all-new L8 model to SUNWODA cells upon its June launch, completely excluding CATL. On September 7, Li Auto announced that its entire lineup would use self-developed batteries, and all locked MEGA orders have since pivoted to its in-house 5C ternary lithium cells. Additionally, Li Auto invested 2.65 billion yuan to raise its stake in SUNWODA Power to 11.17%, becoming its second-largest shareholder. Battery product definition and BMS algorithms are now led entirely by Li Auto, with SUNWODA acting as contract manufacturer.

Xiaomi EV unveiled its Long Arm Battery on September 4, equipped across the Pengcheng series, with cells supplied by CALB and SUNWODA — CATL is entirely absent. Previously, CATL accounted for over 80% of cells in Xiaomi's delivered vehicles, a share now being diverted. HIMA (Harmony Intelligent Mobility Alliance) — the AITO M6 pure electric version now uses Gotion High-Tech's LFP batteries, breaking CATL's exclusive supply position, with Zhijie and Shangjie models also introducing CALB and SUNWODA. Meanwhile, XPeng has made CALB its largest supplier, with the entire MONA series exclusively sourced from CALB, leaving CATL only in select high-end long-range variants. According to third-party installation estimates, Li Auto and Xiaomi together account for roughly 13.6% of CATL's domestic installations.

Why Are Automakers Switching Cells?

The answer lies on the income statement. In the first half of 2026, 15 major listed automakers generated a combined net profit of just 21 billion yuan. CATL alone earned 43.28 billion yuan — more than double the total of all 15 automakers combined. Power batteries account for 30% to 40% of a vehicle's total cost. When GAC's former chairman Zeng Qinghong quipped in 2022, "Am I not working for CATL?", it remains a thorn in the side of automakers four years later.

Behind this lies a deeper battle for product definition. Range, fast charging, safety, and low-temperature performance are no longer mere component specs — they are the core selling points of new energy vehicles. In the past, automakers bought batteries by selecting CATL, waiting for production slots, and accepting specifications; BMS strategies and charge-discharge curves were locked by the battery maker. Now, the shift is toward setting their own standards, using multiple suppliers for contract manufacturing, and mastering the underlying technology. The transition from "buying batteries" to "defining batteries" signals power migrating back to the automakers.

From a $40B Buyback to Just $280M Purchased

On July 24, CATL unveiled the largest share buyback plan in A-share history: between 20 billion and 40 billion yuan, with a price cap of 573 yuan per share, all shares to be cancelled. The plan was approved by shareholders on August 12. Then what? As of August 31, the company confirmed in an announcement that no repurchase had been executed — 41 days without buying a single share. As the stock slid from 383 yuan at announcement to around 350 yuan, market skepticism mounted.

On September 11, the first repurchase finally arrived: 604,300 shares at a cost of approximately 200 million yuan, with the highest execution price at 331.61 yuan. That 200 million yuan represents just 1% of the lower bound of 20 billion yuan. The first tranche of a 40 billion yuan commitment was a mere 200 million yuan, and the stock still fell 2.23% that day. The company holds 372 billion yuan in cash, and the 40 billion yuan upper limit accounts for only 10.54% of net assets. Money is not the issue — attitude is. The market expected hundreds of billions in real buying; it got a tentative 200 million. A massive buyback was meant to signal strong conviction that the stock is undervalued. Delaying execution and then entering at a minimal level undermines credibility. Online forums are flooded with complaints about "squeeze-tube buybacks" and suspicions of deliberately suppressing the share price to buy back cheaply.

Further Headwinds: Consumption Tax, Solid-State Batteries, and Overcapacity

Beyond the de-CATL-ization trend, three additional threats loom simultaneously. First, the consumption tax: starting September 1, liquid lithium batteries incur a 2% consumption tax, rising to 4% by 2027, while solid-state batteries are exempt until the end of 2028. This leaves CATL's core product — liquid lithium batteries — facing a permanent cost disadvantage, while solid-state technology accelerates its replacement of existing capacity.

Second, solid-state batteries: Last week, CATL responded that it would begin small-batch production of solid-state batteries by 2027, and BYD immediately announced its own solid-state batteries would debut in vehicles the same year. Once solid-state batteries reach mass production, a significant portion of CATL's hundreds of GWh in liquid-cell capacity, supply chain, and technical accumulation becomes sunk cost. Third, overcapacity: Many regions have nearly stopped accepting new production capacity filings for power and storage batteries. Planned expansion in storage cell capacity exceeds 800 GWh, with total planned capacity approaching 2 TWh — far beyond actual global demand. Intensified competition is compressing prices. Lithium carbonate futures have fallen from 160,000 yuan per ton to 140,000 yuan per ton since September, a drop of over 11%. Lithium prices are a demand thermometer; their decline signals weak downstream demand.

Foreign Banks Remain Bullish, But Capital Votes with Its Feet

Divergence has never been wider. CLSA maintains a "High Conviction Outperform" rating with an H-share target of 770 HKD, arguing the current price already reflects pessimism and there is no evidence CATL is systematically losing market share. Morgan Stanley maintains "Overweight" with forecasts of 95 billion yuan and 116 billion yuan in net profit for this year and next. Goldman Sachs sets an H-share target of 947 HKD, and CICC holds an A-share target of 500 yuan. Yet these lofty targets have not stopped capital from exiting. Over the past ten trading days, main capital flows have seen net outflows exceeding 4.8 billion yuan, and fund holdings have been slashed from 517 million shares to 308 million shares.

Earnings are rising, profits are growing, and global share is expanding — yet the stock keeps falling. This is not a fundamental breakdown but the market assigning CATL a new valuation framework — shifting from "irreplaceable monopolist" to "leader facing structural share erosion." CATL is still the same company, but the market is no longer the same market. When leading automakers like Li Auto, Xiaomi, and HIMA collectively reduce their reliance, when a 40 billion yuan buyback delivers only 200 million, and when consumption tax and solid-state batteries close in simultaneously, the moat remains but the water level is clearly dropping. Earning 240 million yuan a day cannot stop an 18% monthly decline. This is not the endgame for CATL, but it must answer an increasingly urgent question: when automakers no longer see it as indispensable, how much premium is left for the leader?