According to finance.biggo.com, CATL’s net profit attributable to shareholders in the first half of 2026 totaled 43.248 billion yuan (approximately $6.5 billion), more than double the 21.048 billion yuan (approximately $3.1 billion) collectively earned by 15 major Chinese automakers listed on A-share and Hong Kong markets.
Profit Imbalance Escalates at Power Battery Conference
The widening gap was spotlighted at the 2026 World Power Battery Conference held September 3–4 in Yibin, Sichuan Province. Changan Automobile Vice President Deng Chenghao stated that battery cell makers averaged a 12.9% profit margin in H1 2026, while automakers averaged just 3.7%. He described the inverted structure as severe, noting that OEMs delivering products and services directly to consumers operate on razor-thin margins or at a loss — undermining industrial chain balance.
Chery Holding Group Chairman Yin Tongyue added that despite pledges of shared risk and reward, battery makers retain a disproportionate share of gains. Voyah Chairman Lu Fang emphasized that core components — batteries and chips — now capture most industry profits, squeezing automakers’ capacity for R&D iteration, technological innovation, and market operations.
Former GAC Group Chairman Zeng Qinghong’s 2022 quip — “Am I not just working for CATL?” — has evolved into a widely shared sentiment across the industry, reflecting deepening structural strain.
Market Concentration Drives Bargaining Power Asymmetry
Cui Dongshu, head of the China Passenger Car Association, attributed the erosion of automaker profitability not merely to battery makers’ earnings but to a fundamental mismatch in market concentration. In H1 2026, CATL held a 46% domestic market share and 39.9% overseas share — its domestic installation volume roughly equaling the combined total of the second through tenth-ranked players.
In contrast, China’s auto market remains highly fragmented: the top five domestic automakers’ H1 sales volumes differed by less than 200,000 units, over 130 car brands are active, and only a handful achieve annual sales of one million units. This concentrated upstream and fragmented downstream structure directly shapes supply chain bargaining power.
Cui noted that upstream battery segment net profit surged from 37.6 billion yuan (approximately $5.6 billion) in 2023 to 68.3 billion yuan (approximately $10.2 billion) in H1 2026, with net margin rising to 9%. CATL alone accounted for 47 billion yuan (approximately $7.0 billion) of that total, at a net margin of 17%.
Price Volatility and Prolonged Price War Compound Pressure
Battery-grade lithium carbonate prices peaked at 200,500 yuan per ton (approximately $30,000) on May 13, 2026 — up more than 160% from the 75,000 yuan per ton (approximately $11,000) low at end-2025. Though prices retreated to 152,000 yuan per ton (approximately $23,000) by early September, the price center had clearly shifted upward.
Lu Fang said all raw materials — memory chips, batteries, petrochemical products, aluminum, and steel — are rising. XPeng Chairman He Xiaopeng lamented that price increases anywhere along the supply chain hit automakers directly. Meanwhile, the auto industry’s price war has persisted for three and a half years since Tesla cut Model 3/Y prices in January 2023. Per-vehicle gross profit fell 17%; a vehicle originally priced at 300,000 yuan (approximately $45,000) now yields just over 10,000 yuan in gross profit, down from over 20,000 yuan.
The auto industry’s overall profit margin slid from 5.71% in 2022 to 3.6% in the first seven months of 2026 — a four-year low. Downstream services gross profit stood at just 16.5 billion yuan (approximately $2.5 billion), with gross margin between 8% and 11%, versus upstream battery gross profit of 157.4 billion yuan (approximately $23.5 billion) and steady 20% gross margin.
Battery Makers Defend Margins Amid Industry Critique
Facing collective automaker grievances, battery firms reject calls to cede margins. A representative from a participating company argued that upstream players should not be expected to surrender profits simply because the auto price war is intense. EVE Energy (300014.SZ) Chairman Liu Jincheng observed that battery company chairmen appeared “radiant” at recent meetings, citing strong H1 results — a rare period of broad success.
He stressed that every industry experiences peaks and troughs, and survival depends on internal strategy. Data supports this view: CATL’s net margin rose from 10.18% in 2022 to 18.12% in 2025 and stood at 16.98% in H1 2026. Battery makers’ profitability stems from long-term technology accumulation and economies of scale — not just raw material spreads.
At the conference, Miao Lixiao, general manager of Changan Automobile’s Advanced Battery Research Institute, confirmed that all-solid-state batteries still face unresolved industrialization hurdles — particularly solid-solid interface challenges — reinforcing lithium iron phosphate (LFP) as the dominant, long-term technology foundation.
Source: finance.biggo.com
Compiled from international media by the SCI.AI editorial team.
