$72.2 Billion, the "Terrifying" CATL

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Source | Deep Blue Finance

Written by | Yang Bo

Speaking of CATL, everyone knows it as the “Ning Wang” of the power battery industry. Previously, a major automotive group chairman once said, “We are working for CATL.” Now it seems that this statement has come true again.

On March 9th, CATL released its 2025 annual report. The results are truly impressive, hitting a new record high—both revenue and net profit broke records, with net profit reaching 72.2 billion yuan. This “Ning Wang” status is basically sealed again. This performance, far exceeding market expectations, also directly boosted the stock price: on March 10th, CATL’s Hong Kong shares surged 9.34%. A-shares also rose by 5.26%, with market value reaching 1.7 trillion yuan.

In fact, CATL’s outstanding performance is quite straightforward: on one hand, the prices of upstream materials for lithium batteries were relatively low in the first half of last year, saving a lot of costs; on the other hand, its technology and market share in power batteries and energy storage have always been leading, making it difficult for competitors to catch up in the short term.

However, beneath the halo, CATL will face two major key challenges in 2026: first, the surge in lithium ore prices combined with geopolitical impacts increasing costs; second, technological challenges triggered by BYD’s second-generation blade batteries and fast-charging breakthroughs.

1

Earning 200 million a day, profit surpasses the total of over 13 automakers

The “Ning Wang” performance is considered “rock-solid.”

In 2025, CATL’s operating revenue reached 423.7 billion yuan, surpassing 400 billion for the first time in history, a 17.04% increase from last year; net profit attributable to shareholders of the listed company soared to 72.201 billion yuan, a 42.28% year-on-year increase, averaging about 200 million yuan net profit per day! Moreover, the growth rate of net profit is 2.5 times that of revenue growth, indicating both increased sales and profits.

Breaking it down, the core power battery business achieved revenue of 316.5 billion yuan, up 25.08% year-on-year, accounting for 74.7% of total revenue—almost three-quarters; annual power battery sales volume reached 541 GWh, up 41.85%, with global market share increasing by 1.2 percentage points to 39.2%, also a record high. Whether domestically or overseas (first time surpassing 30%), its market position is top-tier, with nearly all mainstream global automakers as clients—truly strong.

Energy storage batteries also performed well: revenue of 62.4 billion yuan, up 8.99%; sales volume of 121 GWh, up 29.13%, maintaining the top global shipment for five consecutive years. This segment is also a key strength.

Notably, CATL’s better-than-expected annual report last year was mainly driven by explosive growth in Q4. In Q4 alone, revenue was 140.6 billion yuan, with net profit attributable to parent company of 23.2 billion yuan, up 36.6% and 57% respectively year-on-year, far exceeding market expectations—truly the “engine” for annual growth.

With strong performance, cash reserves are also abundant. In 2025, net operating cash flow reached 133.2 billion yuan, and at year-end, cash plus trading financial assets totaled 392.5 billion yuan—truly solid financial footing.

In summary, last year’s impressive results mainly relied on three factors: first, higher-than-expected shipment volumes and strong sales; second, effective cost control through long-term fixed-price agreements, pre-stocking low-cost raw materials, and scale advantages reducing unit costs; third, good product layout, with flagship products like Kirin batteries and Shenxing super-charging batteries boosting overall profitability.

According to Hongxing Capital Bureau’s analysis, based on the performance forecasts or quick reports of 13 A-share listed vehicle companies for 2025, CATL’s net profit in 2025 has already surpassed the combined profits of these 13 automakers (excluding BYD).

So, the question is, in 2026, can CATL maintain this momentum and continue to exceed expectations?

2

Two major variables and challenges in 2026

The first hurdle is raw materials, the most direct pressure.

In the first half of 2025, lithium carbonate prices were relatively affordable, dropping from 70,000 yuan/ton to about 59,000 yuan/ton, allowing CATL to save significant costs. But at the start of 2026, lithium carbonate prices “shot up”—spot prices quickly exceeded 140,000 yuan/ton, futures soared to a peak of 180,000 yuan/ton, causing battery costs to rise sharply, bringing considerable pressure.

Adding to the complexity, global geopolitical tensions are also complicating matters. At the end of February, Zimbabwe’s Ministry of Mines suddenly announced a suspension of all lithium ore and concentrate exports, with no clear timeline for resumption. Notably, about 19% of China’s lithium concentrate imports in 2025 came from Zimbabwe, so this effectively cut off a supply source. Fortunately, lithium supply is still available from Australia and South America. CATL has stated it will respond by product price linkage, supply chain pre-emptive planning, and increasing long-term agreements, but the ultimate impact remains uncertain.

The second challenge involves external technological and strategic disruptions.

On March 5th, BYD, the world’s second-largest power battery manufacturer, suddenly announced its second-generation blade batteries and fast-charging technology, setting a new record for mass-produced charging speed—at room temperature, charging from 10% to 70% takes only 5 minutes, and from 10% to 97% takes just 9 minutes; even in -30°C extreme cold, charging from 20% to 97% only takes 12 minutes.

What does this mean? It’s comparable to refueling as fast as charging! This directly shook the industry, and battery manufacturers that can’t keep up with the technology or lack charging infrastructure are likely to be marginalized over time. Moreover, more automakers are starting to purchase BYD’s Fudi batteries, such as Xiaomi Auto and NIO Leado, posing a significant challenge to CATL.

However, as a leading enterprise, CATL still has countermeasures. In fast-charging, it has the second-generation Shenxing batteries with peak charging rates up to 12C, but still lags behind BYD’s second-generation blade batteries with 1.5 MW. In the high-end market, Kirin batteries have a good reputation and large market share, providing a solid foundation; in the mid-to-high-end segment, Xiaoyao batteries are also competitive. Additionally, CATL is accelerating the commercialization of sodium batteries, which have obvious cost advantages. Strategically, CATL is also developing “chocolate swap” models, continuously improving its business model and creating differentiation.

In overseas markets, CATL is also making efforts: its German factory started profitability in 2025; the Hungarian plant plans to start production early 2026; the cell production line at the Indonesia project is being tested; the Spanish mega-factory is expected to start operation by the end of the year with an annual capacity of 50 GWh, mainly serving European automakers. These overseas advantages are steadily consolidating, further supporting its position as the global leader.

3

Conclusion

Most major institutions remain optimistic about CATL’s outlook for 2026.

Dongwu Securities has raised its forecast for CATL’s net profit attributable to parent in 2026 to 94 billion yuan, a 30% increase year-on-year, believing it has strong ability to pass on costs, with power exchange and energy storage businesses supporting growth; Southwest Securities maintains a “positive” rating, recognizing its full industry chain layout and technological barriers, expecting energy storage and other emerging businesses to continue boosting profitability.

Will 2026 bring greater opportunities or more pressure for CATL? Between CATL and BYD, who do you prefer?