Recently, the industry has been buzzing about "de-CATL-ization": automakers are successively introducing second sources, taking stakes in battery manufacturers, and developing batteries in-house, as if CATL is about to be abandoned.
However, looking at the power battery supply chain news from the first half of 2026 together, an interesting "sense of parallelism" emerges:
On one hand, SAIC-GM-Wuling and BAIC Group have successively signed strategic cooperation agreements with CATL, and Volkswagen Group awarded CATL its annual award; on the other hand, Li Auto invested CNY 2.65 billion to take a stake in Sunwoda Power, and Xiaomi Auto partnered with CALB and Sunwoda Power to launch the Dragon Armor battery system.
In fact, automakers have never said, "We are not using CATL anymore."
The so-called "de-CATL-ization" is essentially a more mature supply chain layout—not a shift, but a balance of power.
Automakers' "Three-Pronged Strategy"
If we break down the automakers' actions in the battery supply chain, we will find that they are actually laying out three lines simultaneously.
For high-end core models, they continue to deepen cooperation with CATL. This is the overt "cooperation" and also the part most easily ignored by public opinion.
Although the Li Auto L series has introduced Sunwoda and in-house batteries, for the core versions of high-end models and orders with the highest requirements for performance and consistency, CATL remains the main supplier. For the early versions of Xiaomi SU7 and YU7, the NIO ET series, and the XPeng G9—these high-end models where users are most sensitive to quality—CATL is still the core partner.
Why? Because the safety and consistency of power batteries are the lifeline of automakers.
Ni Jun, Chief Manufacturing Officer of CATL, mentioned in an interview in September: "It is not difficult to make one good battery; the hard part is making one billion batteries of the same good quality."
Behind this statement is the manufacturing capability and quality control system accumulated by CATL through over a decade of R&D investment exceeding CNY 100 billion.
For automakers, the quality stability of high-end models is the cornerstone of brand reputation.
Therefore, an interesting phenomenon can be observed: the more diversified the supply chain layout of an automaker, the more it values deep cooperation with CATL for its high-end models.
This is not a contradiction, but an inevitable choice for the supply chain management of mature automakers.
For high-volume models, automakers are building a multi-supplier system. This is the part that public opinion pays the most attention to, and also the source of the "de-CATL-ization" label.
The facelifted Li Auto L8 introduced Sunwoda; Xiaomi's Pengcheng series adopted a dual-supply of CALB and Sunwoda; the pure electric version of AITO M6 is equipped with Gotion High-Tech; XPeng included CALB in its core supplier system; and Leapmotor has even built a pattern of joint supply by multiple suppliers such as Gotion High-Tech, CALB, and SVOLT.
Why promote a multi-supplier strategy for high-volume models?
Because scaled models have higher requirements for cost, capacity assurance, and delivery resilience. Building a multi-supplier system can not only diversify the capacity risk of a single supplier but also maintain the flexibility and bargaining power of the supply chain in market competition.
What is even more noteworthy is the deep involvement of automakers—it is no longer simple procurement and delivery, but intervention from the product definition stage.
Li Auto invested CNY 2.65 billion to increase the capital of Sunwoda Power. In Li Auto's own words, "the core is centered around battery technology and manufacturing."
In Xiaomi's Dragon Armor battery system, Xiaomi is responsible for product definition, leads the design and development of the battery pack, participates in the design and development of battery cells, and implements full-process quality control; CALB customizes and develops the electrochemical system and materials according to Xiaomi's definition, and Sunwoda Power provides cell manufacturing capabilities, with both parties building dedicated production lines.
Xiaomi has also set up more than 8,000 quality inspection points on the production line through the "shadow factory" mechanism, with quality experts stationed at the supplier's production line to implement penetrating management of first- and second-tier sub-suppliers.
This is no longer the traditional "Party A and Party B procurement relationship," but rather a deeply collaborative joint development model.
At the same time, automakers are also carrying out forward-looking layouts and in-house battery technology reserves.
If multi-supply is "horizontal expansion," then in-house battery development is "vertical deepening."
Li Auto disclosed its in-house 5C battery plan, where cells are manufactured by partners, and packs are produced by Li Auto itself, with plans to gradually cover the entire vehicle lineup. Although Xiaomi's Dragon Armor battery system does not manufacture its own cells, Xiaomi is deeply involved in the underlying design of the electrochemical system, and product definition, battery pack design, and quality control are all led by Xiaomi.
NIO is also promoting the mass production plan of its in-house large cylindrical batteries. Traditional automakers such as GAC, Dongfeng, and Geely are also continuously investing in the field of in-house power battery development.
The core of automakers developing batteries in-house is not to manufacture cells themselves, but to master the right to define battery technology.
The future model is more likely to be: automakers define technical standards and product requirements, while battery manufacturers are responsible for scaled production.
Under this model, automakers transform from "battery purchasers" to "technology definers," and battery manufacturers transform from "technology providers" to "collaborative manufacturers."
This is the deepest meaning of this round of supply chain adjustment—it is not about who not to use, but about who defines the standards.
Why Now?
The supply chain adjustment of automakers did not happen suddenly.
Why did it break out intensively precisely in 2025-2026? Because three underlying conditions matured simultaneously.
First, the profits in the industrial chain need to be rebalanced.
In the first half of 2026, CATL's net profit attributable to shareholders was CNY 43.2 billion, with an average daily profit of about CNY 240 million. On the other side, against the backdrop of a price war, the overall profit margin of NEV (New Energy Vehicle) manufacturers remains under pressure.
Batteries account for about 40% of the cost of electric vehicles. When the profit distribution gap between the upstream and downstream of the industrial chain widens to a certain extent, rebalancing is inevitable.
Automakers promoting the multi-supplier strategy and deepening cooperation with second-tier battery manufacturers is essentially promoting the reasonable distribution of profits in the industrial chain. This is not a matter of right or wrong, but a natural law when the industry develops to a certain stage. A healthy industrial chain requires reasonable profit margins for both upstream and downstream to achieve sustainable development.
Second, the scale of automakers has reached the level to support multiple suppliers.
The effective scale of an advanced cell production line is about 10GWh, which can roughly assemble 170,000 to 200,000 complete vehicles. When an automaker's annual sales were only in the hundreds of thousands, it was difficult to leverage the scale effect of the production line by solely supporting a second supplier.
But it is different now.
The annual sales of brands like Li Auto, Xiaomi, and Leapmotor have entered a higher magnitude, several times the effective scale of a single production line. Only when the automakers' own scale is large enough do they have the ability to support the operation of a multi-supplier system.
This is like corporate procurement—when the annual procurement amount is small, it can only be concentrated on one or two suppliers; when the annual procurement amount increases, it will naturally develop multiple suppliers to ensure supply and optimize costs.
This is the inevitable result of economies of scale.
Third, the overall technical level of the battery industry is improving.
A frequently ignored fact is that over the past few years, the overall technological progress in the domestic power battery industry has been very fast.
Companies such as CALB, Sunwoda, Gotion High-Tech, and EVE Energy have made considerable progress in technical routes such as ternary lithium, lithium iron phosphate, and large cylindrical batteries, with continuous improvements in product performance and manufacturing consistency.
When the technological foundation of the entire industry is moving upward, automakers naturally have more room for choice.
It is not about who replaces whom, but the rising tide of the entire industry that provides automakers with the foundation to build a diversified supply chain.
Cao Guangping, Partner at Chefu Consulting, also stated in an interview that automakers' in-house development of power batteries involves both tactical considerations and strategic layouts. First, the dual track of "in-house development + external procurement" runs in parallel to ensure supply security and reduce procurement costs and supply interruption risks; second, mastering core battery technology to get rid of over-reliance on leading suppliers; third, positioning in advance for the upcoming solid-state battery competition.
How is "King Ning" Responding?
Facing the trend of supply chain diversification by automakers, CATL's response is well worth observing.
It did not step forward to emphasize market share, but played two cards.
The first card was played at the senior management level, personally by Zeng Yuqun.
On September 3, the 2026 World Power Battery Conference was held in Yibin. Zeng Yuqun, Chairman and CEO of CATL, delivered a speech via video, repeatedly emphasizing two words: quality and trust.
He said, "At the current scale of mass production, all small problems will be multiplied, leaving no room for any fluke." "When quality is pursued to the end, what settles down is trust. Trust is not exchanged for low prices; it comes from high quality maintained day in and day out for ten years."
The second card was played on the manufacturing side, by Chief Manufacturing Officer Ni Jun.
In mid-September, Ni Jun was interviewed by multiple media outlets at CATL's Global Quality Open Month event, emphasizing the consistency challenge in large-scale manufacturing of power batteries: "Knowing how to build a car doesn't mean knowing how to build a battery. We still need professionals to do professional things." "It is not difficult to make one good battery; the hard part is making one billion batteries of the same good quality."
The division of messaging between the two is very clear: the Chairman faces the industry and the public, talking about quality and trust; the Chief Manufacturing Officer faces technology and the industry, talking about consistency and scale.
This is not a random response, but a complete industrial narrative—CATL's core competitiveness lies not in the numbers of market share, but in the manufacturing capabilities and quality systems accumulated over more than a decade.
From a data perspective, CATL's industry position remains solid. According to data from the Power Battery Alliance, from January to June 2026, CATL's market share in domestic passenger vehicle battery installations reached 46.7%, a year-on-year increase of 5.6 percentage points. According to data released by market research institution SNE Research, from January to June 2026, CATL ranked first with an installation volume of 242.7 GWh, and its market share further expanded to 39.9%.
However, the reaction of the capital market also merits attention. CATL's A-shares and H-shares experienced adjustments, and its market capitalization declined somewhat.
Market pricing reflects not only current operational data but also expectations for future changes in the industrial landscape.
As automakers participate more and more in battery technology definition and the overall technical level of the industry improves, the competitive dimensions of the power battery industry are changing.
A New Pattern of "Multipolar Balancing" is Coming
Many people interpret this round of adjustment as "CATL is going to be replaced," which is a typical misreading.
The future power battery industry will not be the old pattern of one dominant player, nor will it be a new pattern where a few rise and one falls. What is more likely to emerge is a new structure of "multipolar balancing":
CATL remains the core pillar of the industry. For high-end models with the highest requirements for safety, consistency, and brand endorsement, CATL is still the preferred partner for automakers. Its technological accumulation, manufacturing capabilities, and global supply chain system constitute the basic foundation of the industry.
Second-tier battery manufacturers grow together to form a multi-level supply system. Companies such as CALB, Sunwoda, Gotion High-Tech, and EVE Energy each have their own advantages in different technical routes, price ranges, and regional markets, forming a complement to CATL. Automakers choose the most matching supplier combination according to the positioning and needs of different models.
Automakers master the right to define battery technology. Regardless of whose cells are ultimately used, technical standards, product definition, and quality control will be increasingly led by automakers.
Batteries transform from "black-box procurement items" to "standard parts defined by automakers," which is the inevitable direction of the refinement of industrial division of labor.
In other words, the essence of this round of adjustment is not about who replaces whom, but the redistribution of power in the industrial chain.
In the past, the power in the power battery industry was more in the hands of leading battery enterprises. Now, with the expansion of automakers' scale, improvement of technological capabilities, and overall progress of the industry, the power is shifting towards OEMs.
This is not about right or wrong, but the natural evolution of the industry when it develops to a certain stage.
For automakers, building a multi-supplier system, deepening technological cooperation, and laying out in-house reserves are compulsory courses for the supply chain management of mature automakers.
Just as no key component will only seek one supplier—batteries, as the most core component of electric vehicles, should be no exception.
For battery enterprises, the diversification of automakers' supply chains is not a threat, but an opportunity for the entire industry to grow bigger and stronger.
When more automakers participate in battery technology definition and more battery enterprises show their strengths in different tracks, the technological iteration of the entire power battery industry will be faster, products will be richer, and costs will be more competitive.
Final Thoughts
The supply chain is a very interesting thing. Between suppliers and customers, it has never been a simple transaction relationship, but a dynamic balance of power.
When CATL rose rapidly in those years, automakers actively embraced it and cooperated deeply. When automakers' scale increased and their technological reserves were sufficient, they naturally sought ways to optimize the supply chain structure and strive for more power. This is common sense in the business world, not some kind of "shift."
The power battery industry has come to today, having passed the stage of "one dominant player and one setting the standards." The future pattern will definitely be a multipolar pattern where multiple battery enterprises have their own strengths, multiple automakers have their own choices, and technological routes flourish.
This is a good thing for the entire industry.
The era of "one superpower and multiple strong players" in power batteries is passing, and a new pattern of "multipolar balancing and collaborative development" has begun.