CATL shares have slid to the brink of a 52-week low, and the pressure is coming from an uncomfortable direction: the very automakers that built the battery giant’s dominance are quietly hedging their bets.
The stock dropped 3.4% in the previous session to 305.48 yuan, hovering just above its yearly trough of 299.00 yuan and sitting 35% below its May 7, 2026 peak. It also trades 18% under its 50-day moving average, with a relative strength index of 22.1 — a reading that screams oversold. The 30-day annualized volatility stands at 29%, underscoring how jittery the trading has become.
A Gradual Break, Not a Clean One
What’s rattling investors is the slow unraveling of CATL’s customer concentration, long treated as its greatest strength. Li Auto and Xiaomi are both pushing to source batteries from alternative suppliers or develop them in-house, according to media reports. Li Auto said it will roll out its own battery technology across its entire model lineup starting September 7.
Yet the picture is messier than a simple defection. Li Auto confirmed that initial deliveries of its new MEGA generation will still use CATL’s 5C ternary lithium cells. Customers who ordered after 3:00 p.m. on announcement day, however, will receive the self-developed batteries, with deliveries beginning in November. The substitution is incremental — for now.
Speculation is also swirling about possible production cuts in September and a decline in net profit per unit for the third quarter, adding to the sense that near-term earnings face headwinds.
Price Power Persists in Storage
Not every signal points downward. CATL raised list prices for its 314 Ah energy storage cells from 0.414 to 0.423 yuan per watt-hour — evidence that the company still commands pricing authority in the storage segment even as the vehicle business comes under strain.
The company also completed its first A-share buyback, repurchasing 604,293 shares for roughly 200 million yuan, a move management framed as a bet on undervaluation. On Tuesday, China’s market regulator SAMR approved a battery-related transaction involving CATL, a decision that could further consolidate the sector. And a strategic cooperation agreement with Taijin New Energy, announced via the company’s official WeChat channel, signals a push to diversify beyond its core customer base, though the scope remains unspecified.
Should investors sell immediately? Or is it worth buying CATL?
Regulatory and Political Crosswinds
Back home, Beijing has reportedly suspended approvals for new energy storage plants amid concerns about overcapacity — not an immediate operational blow for a market leader, but a sign that policymakers are watching the sector’s growth more warily.
A revised consumption tax policy on batteries has also taken effect, imposing a 2% levy on lithium-ion batteries with a further increase slated for 2027. The impact on mass-market margins should be moderate at first, but it adds another layer of cost pressure.
Across the Pacific, the U.S. Department of Transportation voiced concern in early September over Ford’s business ties to CATL, Geely and BYD, calling those relationships a matter of “deep concern.” The agency also pointed to CATL’s inclusion on a Pentagon list of companies with alleged links to the Chinese military — a political risk that could make Western automakers think twice about deepening partnerships.
CATL Chairman Robin Zeng has added his own warning to the mix, cautioning that shortened development cycles among Chinese EV makers and relentless price competition are contributing to quality problems and potential battery failures in the domestic market. Should that debate intensify while customers like Li Auto and Xiaomi expand their in-house efforts, the erosion of CATL’s customer base could accelerate rather than stabilize.
Product Pipeline Offers a Counterweight
Amid the gloom, CATL used the IAA Transportation 2026 show in Hanover to unveil TECTRANS II, a next-generation battery solution for commercial vehicles. The company is also targeting first customer deliveries of its sodium-ion energy storage systems in September, aiming for GWh-scale volumes this year. A successful launch could serve as a diversification signal and loosen its reliance on the contested core customers.
Whether that’s enough to offset the structural questions hanging over the business is the crux. As long as CATL holds pricing power in storage and keeps buying back stock, the current weakness may read as an oversold correction. But if substitution spreads beyond Li Auto to buyers like Xiaomi, the case for durable margin erosion becomes harder to dismiss.
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