Despite stock stress, CATL likely to retain EV battery dominance in China, analysts say
CATL faces pressure from Chinese EV makers seeking to diversify their battery suppliers. Xiaomi and Li Auto partnered with tier-two manufacturers like CALB Group. Xpeng plans in-house battery pack production this year. CATL's shares have fallen 25.7 percent since mid-August and 36.5 percent from their May high. Analysts believe CATL's technology and brand recognition will maintain its market dominance for the coming year.
CATL's stock drop reflects carmakers' push to reduce reliance on a single supplier. The 25.7 percent share loss since mid-August shows investor concern. Xiaomi and Li Auto's deals with CALB Group are direct challenges. Xpeng's in-house battery plans further intensify this competition. Carmakers want more control and better pricing, not just alternatives.
This shift benefits tier-two Chinese battery manufacturers. CALB Group gains market share from major EV players. It also pushes EV makers like Xpeng to invest in their own battery R&D and production. This competition could drive down battery costs across China's EV sector. CATL will need to innovate faster to keep its edge.
The thing to watch is CATL's market share over the next 12 months. Analysts predict continued dominance, but carmakers' actions are aggressive. A significant drop in CATL's market share would signal a true power shift. It would also validate the carmakers' strategy of supplier diversification.
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