CATL Q1 Net Profit Surges 48.5% as Global Battery Market Share Continues to Expand
0xBroomberg
CATL posted RMB 20.7 billion in net profit for Q1 2026, up 48.5% year-on-year, on quarterly revenue that already exceeds the full-year top line of Li Auto, NIO, or XPeng individually — the battery giant's earnings power is pulling further ahead of the carmakers it supplies, and that profit gap is reshaping who holds leverage across the entire EV value chain.
How does one battery maker out-earn seven automakers combined?
CATL (宁德时代) posted Q1 revenue of RMB 129.1 billion, up 52.5% year-on-year, with net profit of RMB 20.7 billion, up 48.5%.
Seven major Chinese automakers earned a combined net profit of roughly RMB 17.7 billion over the same period. This means → a single battery company made more in one quarter than seven carmakers put together.
In plain terms = the car brands sell on razor-thin margins; the battery supplier sits in the middle of the supply chain and captures profit from both ends.
Auto-sector margins hit 3.2% while CATL holds 17% — where does the gap come from?
China's auto industry overall net margin has fallen to a ten-year low of 3.2%. CATL's net margin sits at roughly 17% — nearly 5× higher.
Battery costs account for 40–60% of EV manufacturing cost, and CATL holds about 48% of China's power-battery market. This means → the single largest cost item for automakers is priced by a supplier with near-majority share.
Automakers often must pay large upfront deposits just to secure battery supply. In plain terms = the buyer has almost no bargaining leverage — and still has to pay up front to get in line.
Overseas share climbs from 30% to 33.7% — are Korean rivals losing ground?
In the first five months of 2026, battery installations outside China totalled 209.1 GWh, up 21.8% year-on-year.
CATL's overseas installations reached 70.6 GWh, up 37%, lifting its share to 33.7%. BYD's overseas installations grew 68.3%, pushing its share to 10.6%.
Korea's big three — LG Energy Solution, SK On, Samsung SDI — saw their combined share outside China fall to 28.4%, down 8.7 percentage points year-on-year; Panasonic's installations dropped 8.5%. This reflects Chinese battery makers replicating their domestic price-and-scale advantages onto the global stage.
Automakers are building their own batteries — how long can CATL's excess profits last?
BYD has already vertically integrated battery production. Geely, GAC, and Xiaomi are developing in-house battery technology or adopting dual-supplier strategies.
This means → the strategic direction from automakers is clear — reduce dependence on CATL and keep more profit in-house.
Analysts argue that as battery capacity expands and technology matures, excess profits in the battery segment may gradually narrow and the profit split could rebalance toward automakers. But when that shift arrives still depends on whether CATL's technological moat can be effectively closed.
Content is for reference only, not financial advice.