CATL, which has long dominated the global EV battery market, has lost hundreds of billions of US dollars in market value recently. Some Chinese customers are pursuing a "de-CATL" strategy, designing batteries in-house or sourcing cells from alternative suppliers.
Chinese automakers including Li Auto and Xiaomi Group have begun designing batteries in-house and bringing in new cell suppliers such as Sunwoda. These moves have sparked concerns over a broader "de-CATL" trend, as CATL's share price has tumbled 34% from its May all-time high, wiping out $100 billion in market value.
Bloomberg cited Morgan Stanley analyst Tim Hsiao, saying Chinese carmakers are squeezed by rising component costs and are taking such steps to boost their bargaining power. "Supplier diversification is a good approach and makes sound commercial sense."
Reports state that fierce price competition has weighed on Chinese automakers' profits, yet CATL's earnings have kept growing, largely thanks to its market dominance and pricing power.
Hu Xijin, former editor-in-chief of the Global Times, quoted an industry contact on Weibo on Wednesday (Sep 16), claiming CATL captures most of the profits and squeezes downstream vehicle manufacturers. "There is a saying circulating in the industry: the whole sector has long suffered under CATL."
Li Auto announced on September 7 that it will gradually equip all its models with self-developed batteries. The launch of the Li Auto i6 electric vehicle was delayed due to late battery deliveries from CATL.
Xiaomi has long relied on CATL and BYD for battery supplies. However, Xiaomi announced this month that its Pengcheng series vehicles will all be fitted with the self-developed Dragon Armor Battery, and it has formed strategic partnerships with CALB and Sunwoda.