Gasgoo Munich- Lately, the industry buzzword is "de-CATL-ization." Automakers are rushing to add second suppliers, invest in battery plants, and develop their own cells — creating the impression that CATL is being cast aside.Yet, viewed together, the power battery supply chain news from the first half of 2026 reveals an intriguing sense of parallelism:On one side, SAIC-GM-Wuling and BAIC Group have inked strategic partnerships with CATL, while Volkswagen Group awarded the company its annual prize. On the other, Li Auto poured 2.65 billion yuan into Sunwoda Power, and Xiaomi teamed up with CALB and Sunwoda Power to launch its Dragon Scale battery system.The truth is, no automaker has ever said, "We're done with CATL."The so-called "de-CATL-ization" is, in essence, a more sophisticated supply chain strategy — not a pivot, but a balancing act.Automakers' "Three-Pronged Strategy"Break down automakers' battery supply chain moves, and you'll find they are simultaneously advancing along three distinct tracks.For high-end core models, they continue to deepen ties with CATL. This is the visible collaboration — and the part most easily overlooked by the public narrative.Although Li Auto's L-series has incorporated Sunwoda and self-developed batteries, the core versions of its high-end models — and the orders with the strictest demands for performance and consistency — still rely on CATL as the primary supplier. For early versions of the Xiaomi SU7 and YU7, the NIO ET series, and the XPENG G9 — all positioned as premium models where quality sensitivity is highest — CATL remains the central partner.Image Source: Xiaomi EVWhy? Because safety and consistency in power batteries are an automaker's lifeline.As Ni Jun, CATL's chief manufacturing officer, noted in a September interview: "Making one good battery isn't hard; making ten billion identical good batteries is."Behind that statement lies a manufacturing capability and quality control system built over more than a decade, backed by billions in R&D spending.For automakers, quality stability in premium models is the cornerstone of brand reputation.This creates an intriguing paradox: the more diversified an automaker's supply chain becomes, the more its high-end models tend to prioritize deep collaboration with CATL.It is not a contradiction, but the inevitable choice for a mature automaker managing its supply chain.For volume models, however, automakers are building multi-supplier systems. This draws the most public attention and is the source of the "de-CATL-ization" label.The refreshed Li Auto L8 brought in Sunwoda; Xiaomi's Pengcheng series adopted a dual-supplier model with CALB and Sunwoda; the AITO M6 EV version is equipped with Gotion batteries; XPENG brought CALB into its core supplier fold; and Leapmotor has built a landscape supported by a mix of Gotion, CALB, and SVOLT.Why push a multi-supplier strategy for volume models?Because high-volume models demand tighter control over costs, capacity guarantees, and delivery resilience. A multi-supplier system spreads the risk of relying on a single source while maintaining flexibility and bargaining power in a competitive market.Even more noteworthy is the depth of their involvement — no longer simple procurement and delivery, but engagement starting from the product definition stage.Li Auto poured 2.65 billion yuan into a capital increase for Sunwoda Power. In its own words, the move "centers on battery technology and manufacturing."Under Xiaomi's Dragon Scale battery system, Xiaomi handles product definition, leads pack design, participates in cell development, and manages full-process quality control. CALB custom-develops the electrochemical system and materials to Xiaomi's specifications, while Sunwoda Power provides cell manufacturing capacity — with both partners establishing dedicated production lines.Xiaomi has also deployed a "shadow factory" mechanism, installing over 8,000 quality checkpoints on production lines. Quality experts are stationed permanently at supplier facilities, exercising deep oversight over first- and second-tier suppliers.This is no longer a traditional "buyer-seller" relationship; it looks more like a deeply collaborative, joint development model.At the same time, automakers are making forward-looking moves by building reserves of self-developed battery technology.If a multi-supplier strategy is "horizontal expansion," then self-developed batteries are "vertical deepening."Li Auto has unveiled plans for a self-developed 5C battery: cells will be contract-manufactured by partners, while packs are made in-house, with a goal of eventually covering the entire lineup. Xiaomi's Dragon Scale system may not involve manufacturing its own cells, but the company is deeply involved in the underlying design of the electrochemical system, leading product definition, pack design, and quality control.NIO is advancing plans to mass-produce its own large-format cylindrical batteries. Traditional automakers like GAC, Dongfeng, and Geely are also pouring resources into in-house battery development.The core of automakers' self-research isn't manufacturing cells themselves, but seizing the right to define battery technology.The future model will likely look like this: automakers define technical standards and product requirements, while battery makers handle mass production.In this model, automakers shift from "battery buyers" to "technology definers," while battery makers transform from "technology providers" to "collaborative manufacturers."This is the deepest meaning of this supply chain reshuffle — it's not about whom you use, but who defines the standards.Why Now?Automakers' supply chain adjustments didn't happen overnight.Why is the shift intensifying specifically between 2025 and 2026? Because three underlying conditions have matured simultaneously.First, profits along the industrial chain need rebalancing.CATL's net profit attributable to shareholders reached 43.2 billion yuan in the first half of 2026, averaging roughly 240 million yuan per day. On the other side, new energy vehicle makers are seeing their overall profit margins remain squeezed amid a brutal price war.Batteries account for roughly 40% of an electric vehicle's cost. When the profit gap between upstream and downstream players widens to a certain point, rebalancing becomes inevitable.By pushing multi-supplier strategies and deepening ties with second-tier battery makers, automakers are essentially driving a more rational distribution of profits. It isn't about right or wrong, but a natural law of industrial development. A healthy supply chain requires reasonable profit margins for both upstream and downstream players to be sustainable.Image Source: CATLSecond, automakers have reached the scale necessary to support multiple suppliers.An advanced cell production line has an effective capacity of about 10 GWh, enough to equip roughly 170,000 to 200,000 vehicles. When an automaker's annual sales are only in the six-figure range, supporting a secondary supplier alone makes it difficult to achieve economies of scale.But things are different now.Brands like Li Auto, Xiaomi, and Leapmotor have moved annual sales into a much higher tier — several times the effective capacity of a single production line. Only with sufficient scale can automakers sustain the complexity of a multi-supplier system.It's like corporate procurement: when purchasing volume is low, you focus on one or two suppliers; as volume grows, you naturally develop multiple sources to secure supply and optimize costs.That is the inevitable result of economies of scale.Third, the overall technical standard of the battery industry is rising.One often-overlooked fact is this: over the past few years, China's power battery industry has made rapid technological strides across the board.Companies like CALB, Sunwoda, Gotion, and EVE Energy have made significant headway in technical routes ranging from ternary lithium and LFP to large-format cylindrical cells, steadily improving product performance and manufacturing consistency.As the industry's technical foundation rises, automakers naturally have more options.It isn't about one player replacing another; rather, the rising tide of the entire industry has given automakers the foundation to build a diversified supply chain.Cao Guangping, a partner at Chefu Consulting, noted in an interview that automakers' in-house battery development involves both tactical and strategic considerations. First, running parallel "self-developed and outsourced" lines secures supply safety while reducing procurement costs and the risk of shortages. Second, mastering core battery technology reduces excessive dependence on leading suppliers. Third, it allows them to position themselves early for the upcoming battle over solid-state batteries.How Is the "Battery King" Responding?Facing the trend of supply chain diversification among automakers, CATL's response is worth watching.Instead of stepping out to emphasize market share, it has played two cards.The first card is played at the top, by Chairman Robin Zeng himself.On September 3, the 2026 World Power Battery Conference was held in Yibin. In a video speech, CATL Chairman and CEO Robin Zeng returned repeatedly to two themes: quality and trust."At current production scales, every small issue is amplified exponentially; there is no room for luck," he said. "Ultimately, quality leaves trust in its wake. Trust isn't bought with low prices; it comes from high quality, day in and day out, for ten years."The second card is played on the manufacturing front, by Chief Manufacturing Officer Ni Jun.In mid-September, Ni Jun spoke with multiple media outlets during CATL's Global Quality Open Month, emphasizing the challenge of consistency in large-scale battery manufacturing: "Knowing how to build cars doesn't mean you know how to build batteries. You still need professionals to do professional work." "Making one good battery isn't hard; making ten billion identical good batteries is."The division of messaging is clear: the chairman speaks to the industry and the public about quality and trust; the manufacturing chief speaks to the technical and industrial sectors about consistency and scale.This isn't a random response; it's a coherent industrial narrative. CATL's core competitiveness lies not in market share figures, but in the manufacturing capability and quality system built up over more than a decade.Image Source: CATLBy the numbers, CATL's industry position remains solid. According to the China Power Battery Alliance, CATL's domestic market share for passenger vehicle installations reached 46.7% in the first half of 2026, up 5.6 percentage points year-on-year. Data from SNE Research shows CATL holding the top spot globally with 242.7 GWh of installations in the same period, expanding its market share to 39.9%.However, the reaction from capital markets bears watching. CATL's A-shares and H-shares have adjusted, and its market capitalization has pulled back.The market is pricing not just current operational data, but expectations for how the industrial landscape will shift in the future.As automakers increasingly participate in defining battery technology and the industry's overall technical level rises, the competitive dimension of the power battery sector is undergoing a change."Multipolar Balancing" New Pattern Is ComingMany interpret this adjustment as "CATL is about to be replaced." That is a typical misreading.The future power battery industry will not be a return to the old pattern of a single dominant player, nor will it simply see a few rise as one falls. A more likely outcome is a new structure of "multipolar balancing":CATL remains the industry's central pillar. For high-end models with the highest demands for safety, consistency, and brand endorsement, CATL is still the automaker's partner of choice. Its technological accumulation, manufacturing capability, and global supply chain system form the industry's foundation.Image Source: CATLSecond-tier battery makers are growing together, creating a multi-tiered supply system. Companies like CALB, Sunwoda, Gotion, and EVE Energy each hold advantages in different technical routes, price bands, and regional markets, complementing CATL. Automakers can select the best combination of suppliers based on the positioning and needs of different models.Automakers hold the power to define battery technology. Regardless of whose cells are ultimately used, technical standards, product definition, and quality control will increasingly be led by the automakers.Batteries are shifting from "black-box purchases" to "standard parts defined by automakers" — the inevitable direction of a more refined division of labor.In other words, the essence of this adjustment is not about replacement, but a redistribution of power along the supply chain.In the past, the power battery industry's voice was largely held by the leading battery makers. Now, as automakers scale up, improve their technical capabilities, and the industry progresses overall, that voice is shifting toward the vehicle manufacturers.It isn't about right or wrong, but the natural evolution of an industry reaching a certain stage of development.For automakers, building a multi-supplier system, deepening technical cooperation, and laying in-house R&D foundations are required courses in mature supply chain management.Just as no critical component should rely on a single supplier, batteries — the heart of an electric vehicle — should be no exception.For battery makers, automaker diversification is not a threat, but an opportunity for the entire industry to grow stronger.As more automakers participate in defining battery technology, and as more battery makers excel in different niches, the power battery industry will see faster technological iteration, richer product offerings, and more competitive costs.In ClosingSupply chains are fascinating. The relationship between supplier and customer is never a simple transaction; it is a dynamic balance of power.When CATL rose rapidly, automakers embraced it and cooperated deeply. Now that automakers have achieved scale and built up technical reserves, it is natural for them to optimize their supply chain structure and fight for greater say. This is common sense in the business world, not a "pivot."The power battery industry has moved past the stage of "one dominant player, one standard-setter." The future landscape will inevitably be multipolar: multiple battery makers with distinct strengths, multiple automakers with choices, and a diversity of technical routes.For the industry as a whole, this is a good thing.The era of "one superpower, many strong players" in power batteries is fading, making way for a new landscape of "multipolar balancing and collaborative development."
+36 others
