Under the leadership of “Ning Wang”, car companies made three major retreats

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Author | Chasing Life

Editor丨Nuts

Cover source丨Unsplash

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The Ningde era has been a bit annoying recently.

As more and more car companies begin to announce self-developed batteries, this giant in the battery industry, known as “Ning King”, is encountering an unprecedented market share crisis.

Misfortunes never come singly. In addition to car company customers, Ningde era’s integrator customers have also encountered “predatory orders”. Recently, Yiwei Lithium Energy subsidiary Yiwei Power signed a relevant supply agreement with leading system integrator Fluence to deepen cooperation on the production and delivery of 206GWh batteries from 2027 to 2031. This is regarded as the largest single framework agreement in the energy storage industry to date, marking the first time that a second-tier battery cell manufacturer has anchored a Tier-1 overseas integrator in the form of a framework agreement.

Previously, Fluence had been a partner of CATL.

Since the beginning of this year, the slogan “When buying electric cars, look for CATL” has appeared more and more on various occasions. However, this anchoring of users’ consumer psychology cannot keep up with the pace of supply chain adjustments by car companies. As more and more car companies no longer regard CATL batteries as their core promotional points, and rely solely on “Ningwang” to sell and boast, it seems difficult to gain the recognition of many consumers.

New energy car companies that used to be jokingly said to be working for the CATL era now want to “change their way of life.” In fact, since 2021, the automotive industry has launched a wave of “de-CATL eraization” at least three times. It was not until September 2026 that this trend truly touched the foundation of the CATL era.

1

The wind rises 2021

At the 2022 World Power Battery Conference, Zeng Qinghong, chairman of GAC Group, said, “Then am I not working for CATL now?” was widely reported by the media, and quietly opened the gap between car companies and CATL.

The disagreement stems from the explosive growth in domestic new energy vehicle sales in 2021. The annual installed capacity of power batteries will reach 154.5GWh, a year-on-year surge of 142.8%, and the industry will fall into a structural battery shortage.

At this time, CATL accounts for half of the domestic power battery market with its absolute production capacity advantage. It not only has strong bargaining power, but also adopts a supply model that prioritizes large customers. However, even so, many mainstream car companies are still facing delivery delays and limited production capacity because they cannot obtain sufficient batteries.

At that time, it was even reported that Xiaopeng Motors CEO He Xiaopeng personally stayed at CATL for a week in order to successfully “get goods” from CATL.

The problem of the new energy vehicle industry being “stuck by King Ning” began to emerge.

Against this background, starting from the second half of 2021, many car companies have begun to try to introduce second battery suppliers. Xiaopeng has included China Aviation (formerly AVIC Lithium Battery) and EV Lithium into the official battery supply system. Tesla and NIO have also simultaneously launched supply chain diversification adjustments. Geely, GAC and other car companies have begun planning to build their own battery production lines.

However, judging from the actual results, the first round of withdrawal of CATL’s customers in 2021-2022 has not affected CATL’s industry dominance. Especially after most car companies piloted secondary supply, problems such as battery adaptation failures and production capacity failing to keep up with vehicle delivery demand have forced many car companies to return to CATL’s main supply system.

According to statistical data, at this time, CATL’s domestic power battery market share throughout the year is still stable at a high level of more than 50%. Hengqiang is still the strong player, but it can no longer get exclusive orders from all car companies.

But starting in 2023, things began to change.

As the production capacity of second-tier battery manufacturers stabilizes and the tension between supply and demand in the power battery industry is fully alleviated, the core demands of car companies have begun to upgrade from “guaranteing supply and reducing prices” to independently mastering core technologies, so as to completely get rid of the dual dependence on the technology and production capacity of upstream battery companies.

For a time, it became common for car companies to personally manufacture batteries. Changan launched its self-developed battery brand Golden Bell, and GAC’s Inpai battery factory was officially completed and put into production.極氪Released self-developed gold brick battery. As of early 2024, public data shows that more than 15 domestic car companies have announced plans for self-research and production of batteries.

However, for automakers, battery manufacturing is still a major crossover. This also makes many small and medium-sized automakers’ self-developed battery projects generally face problems such as lagging production capacity construction, immature core technology, insufficient vehicle adaptability, and high mass production costs.

Judging from actual results, from 2023 to 2024, only two leading car companies, GAC and Geely (Ji Krypton), have achieved stable mass production and batch installation of self-developed batteries with sufficient capital reserves, mature manufacturing systems, and huge sales scale. The self-developed projects of other car companies have not formed effective production capacity replacement.

However, the important significance of the second round of “de-Ningning” lies in the completion of the construction of the automaker’s battery self-research system from 0 to 1, especially the key foreshadowing for the third round of deep de-Ningning after 2025 and the complete restructuring of the supply chain pattern.

2

The third retreat of car companies

Howard Marks once said in his book “Cycles”: “Nothing goes in the same direction forever. Trees don’t grow to the sky, and few things go back to zero.”

No industry can escape the cycle, and the battery industry is no exception.

Beginning in 2025, the domestic power battery industry will completely bid farewell to production capacity shortages and enter a buyer’s market stage of comprehensive overcapacity and complete reversal of supply and demand.

More importantly, the former second-tier battery manufacturers have successively made up for their shortcomings, and have the confidence to challenge the Iron Throne of the CATL era.

Taking Xpeng Motors as an example, perhaps because the experience of waiting for batteries at the CATL factory was too “unforgettable”, Xpeng Motors has also pushed forward the reform of its battery supplier system particularly resolutely.

Multiple supply chain surveys and new car application information from the Ministry of Industry and Information Technology in 2025 show that Xpeng Motors has formed a diversified supply pattern with China New Aviation as the main force, Yiwei Lithium as an important supplement, BYD focusing on the MONA series, and self-developed battery cells gradually increasing in volume.

At the end of 2025, there were news reports that Zeng Yuqun, chairman of CATL, personally led a team to Xpeng Motors’ Guangzhou headquarters. Had an in-depth exchange with Chairman He Xiaopeng. According to outside analysis, this high-level meeting aims to bridge the supply relationship that has been interrupted for many years and re-explore the possibility of cooperation.

However, no subsequent news of substantive cooperation between the two parties came out. On the contrary, in September this year, He Xiaopeng publicly stated, “We will do our own batteries starting this year” and revealed that Xiaopeng has invested in three battery companies.

The more news about this kind of “batteries going it alone”, the more embarrassing the situation of CATL becomes. Especially in the second half of 2026, car companies seem to have discussed it in advance and are intensively making a fuss about battery suppliers.

In June, the Wenjie brand announced the introduction of two second-tier battery suppliers; in September, Xiaomi Motors released its self-developed brand “Longjia Battery”, which is equipped with all Pengcheng series, and the battery cells are supplied by China New Aviation and Sunwoda; in the same month, Xiaomi Motors, which has cooperated with CATL for 10 years,理想汽車Announced that it will launch self-developed batteries and gradually lift its dependence on CATL in stages.

Among them, the sudden “breakup” of Ideal has completely put Ningde Times on the forefront.

In early September, Li Auto invested 2.65 billion yuan in Sunwanda Power, holding 11.17% of the shares. The two parties established a joint venture battery company to achieve in-depth binding of capital, production capacity, and technology. After the adjustment, the new L8 series of Li Auto’s popular main models are all equipped with Sunwanda batteries and no longer use CATL batteries.

As Ideal’s self-developed 5C fast-charging batteries have completed mass production and gradually replaced the original CATL battery cells of MEGA models, Ideal has become the first leading car company in the industry to realize the two-way Ning of “main models + high-end models”.

Although Ideal CEO Li Xiang responded on social media for the first time that self-research is not about antagonizing suppliers, it has obviously been unable to quell the heated discussion in the industry about “decontemporary Ningde”.

While new forces no longer continue to be in love with the CATL, the long-term investments of GAC, Geely, and Changan have also blossomed in the past two years. GAC Inpa batteries, Jikrypton Brick batteries, and Changan Golden Bell batteries have all been installed in large-scale batches. The proportion of self-developed batteries continues to increase, which has further reduced the existing orders of the CATL. Leading car companies have actually formed a three-tier supply chain system with “self-research and production as the mainstay, second-tier manufacturers as the supplement, and CATL as the supplement.”

3

All for profit?

Why do car companies insist on developing their own batteries? In addition to not being willing to be stuck by suppliers, maintaining the gross profit margin of the vehicle is also another important factor.

Li Bin, the founder of NIO, once publicly calculated an account: batteries account for nearly 40% of the cost of the entire vehicle. If calculated at a gross profit margin of 20%, NIO would be able to earn about 8 points more gross profit if it made its own batteries. When car companies purchase batteries from outside, the gross profit margin of the vehicle is generally around 10 points. If NIO develops batteries and chips in-house, the overall gross profit margin can be increased by about 10 points, which is equivalent to the gross profit margin of the vehicle reaching about 20%.

Gross profit determines the life or death of a company, especially for car companies whose profits are already very thin today.

In the first half of 2026, CATL’s net profit was 43.284 billion yuan, which was more than the 15 mainstream domestic listed vehicle companies combined. Even on a global scale, the combined profits of two well-known car companies, Mercedes-Benz and BMW, still cannot keep up with the CATL era.

With such high product profits, the threshold for the power battery industry is far less high than it was ten years ago.

In the early days of industry development, CATL relied on long-term hard work, process iterations, and material system optimization to drive down the cost of battery cells. It also established its own strong technical barriers and even participated deeply in the formulation of domestic and international standards. It has significant technical definition rights in the chemical system, packaging structure, thermal management plan, and BMS algorithm of battery cells.

However, as the industry continues to develop, various types of talents continue to flow, and technology is innovated at all levels, the definition of the CATL era is no longer stable.

How to continue to maintain its leading position, the path chosen by CATL is also quite “unique”.

The financial report shows that in the first half of this year, CATL’s sales expenses increased by 33.4% year-on-year. A sentence began to appear intensively on a large number of prominent advertising spaces in high-speed railways, airports and core business districts of major cities: “Choose trams, look for CATL.”

In May of this year, CATL also launched the “Official Battery Inquiry” channel. Consumers can enter the model name to confirm whether it is equipped with CATL batteries, or whether the batteries are supplied by them alone or by multiple suppliers.

A company doing B-side business has begun to continuously export its brand ideas to the C-side. This approach actually proves from the side that the battery industry itself is difficult to establish a strong technical moat like chips or other high-end manufacturing.

CATL had and still has scale, capital and technology. Even after experiencing three massive “de-Ningning” waves, CATL’s market share remains above 40%. Especially in high-end models, CATL still maintains strong product dominance.

Zhou Jintao, the King of Cycles, once said: “Everyone’s wealth accumulation must not be thought of as how capable you are. Wealth accumulation comes entirely from the opportunities given to you by the economic cycle movement.” CATL’s former industry dominance was not only due to its hard-core efforts to iterate its own technology and deepen its production capacity, but also to accurately capture the super dividends of an era when new energy sources are increasing rapidly and power battery supplies are scarce.

However, the capital market and industrial track have always been cruel and fair: all monopoly premiums that rely on cyclical trends and supply and demand imbalances will eventually complete a complete revaluation in the new cycle of ebbing dividends, overcapacity, and industrial equality.

The essence of the three “de-Ningization” waves and the three rounds of supply chain games is that the industry bids farewell to the barbaric growth cycle and returns. After the filter of the dividends of the times fades away, market-oriented competition that does not rely on scarcity but only on strength is the long-term destiny of the power battery industry in the future.

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