Author | Zhou Zhiyu
Lithium carbonate prices have surged from under 60,000 yuan per ton a year ago to over 150,000 yuan. This is more than a doubling. The entire industry chain is now focused on one question: can the battery leader withstand the pressure on its profits?
CATL's Q1 financial report, released on the evening of April 15, not only withstood the pressure but also exceeded market expectations.
The capital market's reaction was direct. On the day following the release of the Q1 report, CATL's A-share price surged by over 6%, touching 460 yuan per share and setting a new all-time high. Its total market capitalization surpassed 2 trillion yuan. Since the low point in January 2024, the stock price has more than tripled.
Revenue grew by 52% year-on-year during the traditional off-season. Wallstreetcn learned that CATL shipped a combined total of over 200GWh for power and energy storage batteries in the first quarter and expects capacity utilization rates to remain high in the second quarter. Despite raw material costs doubling, profit per watt remained stable.
Looking further ahead, CATL remains optimistic about the industry's performance in the coming years. It is expected that by 2030, the global market for power batteries and energy storage combined could reach 4TWh, maintaining a high-growth trajectory.
<h2>Acceleration During the Off-Season</h2>
Q1 revenue reached 129.1 billion yuan, a 52% increase year-on-year, while net profit attributable to shareholders was 20.7 billion yuan, up 49% year-on-year. CATL delivered impressive results during the traditionally slow first quarter.
The most direct variable was the jump in market share. Data from the China Automotive Power Battery Industry Innovation Alliance shows that CATL's domestic production share of the power battery market rose to 47.72% in Q1 2026, an increase of 3.38 percentage points year-on-year, marking the first time in nearly three years that its share has rebounded.
Last year, CATL's capacity utilization was near full load, leading to orders spilling over to competitors. This year, capacity is gradually being released, causing orders to flow back. CATL indicated that overall production scheduling for the first quarter remained highly saturated.
However, the share rebound represents a recovery of existing volume. There must be other sources for the 52% acceleration rate.
In the first quarter, the average battery capacity per vehicle increased by 10% to 15% year-on-year. Battery packs for extended-range vehicles are getting larger, pure electric vehicles are competing on range, and hybrid vehicles are increasing their configurations. While the growth rate of passenger car sales is slowing, the product of &#34;sales volume multiplied by battery capacity&#34; continues to accelerate. This means that even if the penetration rate story enters a plateau phase, the shipment curve for battery manufacturers will not flatten out.
The explosion in commercial vehicles represents another dimension. In power battery shipments, commercial vehicles and special-purpose vehicles combined now account for approximately one-third of the total, compared to less than one-quarter a year ago. The electrification of heavy trucks doubled year-on-year last year.
This makes commercial vehicles a key highlight this year. As production tools, once they pass the cost inflection point, their expansion speed will be very rapid.
Energy storage has always been CATL's second growth curve, but the significant jump in its proportion during the first quarter is noteworthy. Energy storage accounted for 25% of shipments, corresponding to approximately 50GWh, compared to around 20% at the same time last year. The catalyst was the implementation of capacity-based electricity pricing policies. Energy storage has transformed from a speculative product relying on peak-valley price spreads into infrastructure with guaranteed cash flows. The attitudes of project developers and funders have fundamentally changed.
Share recovery, increased battery capacity per vehicle, the rise of commercial vehicles, and accelerated energy storage—none of these events alone would be surprising. However, appearing simultaneously in a single quarter, their combined effect pushed the growth rate to 52%.
<h2>Stress Test Amidst the Price Hike Cycle</h2>
Whether costs can be passed on is the most critical question this quarterly report needed to answer. Lithium carbonate doubling is just one factor; commodities such as copper and aluminum also rose concurrently, driving up raw material prices across the board. CATL's linkage pricing mechanism with downstream customers faced its first real-world test during a period of significant price hikes.
The result was a gross margin of approximately 24.8%, a slight increase year-on-year.
CATL stated that it did not actively raise prices in the first quarter. Price changes stemmed from metal linkage clauses embedded in contracts; as lithium carbonate prices rose, battery selling prices automatically adjusted accordingly. No one cared about this mechanism when lithium carbonate prices were at the bottom, but now that raw material costs have doubled, the transmission mechanism has proven effective.
Profit per watt remained relatively stable. Rising raw material costs increased the total price of batteries. With the absolute value of profit per watt unchanged, the denominator for the gross margin ratio became larger, naturally compressing the ratio. Additionally, the increased proportion of energy storage products, which have lower gross margins than power batteries domestically, further dragged down the overall margin due to shifts in the shipment structure.
Compared to the full-year gross margin of 26.5% last year, the 24.8% in the first quarter did decline. However, compared to 24.4% in the first quarter of last year, there was a slight improvement. CATL's assessment for the full-year gross margin is &#34;relatively stable.&#34;
Another major variable on the income statement is exchange gains and losses.
Wallstreetcn previously noted CATL's &#34;financial attribute&#34; of holding 330 billion yuan in cash for the full year 2025, resulting in financial expenses of -7.9 billion yuan for the year, essentially earning interest and exchange gains passively. However, in the first quarter, financial expenses swung from -2.29 billion yuan in the same period of 2025 to +0.6 billion yuan, a fluctuation of 2.35 billion yuan. This was due to the strengthening of the Renminbi, which caused exchange losses on the foreign currency exposure within the 350 billion yuan in monetary funds.
This 2.35 billion yuan basically explains why the growth rate of net profit attributable to shareholders (49%) slightly lagged behind the revenue growth rate (52%). Operational profitability did not deteriorate; rather, the tailwind on the financial side turned into a headwind.
<h2>Signals of Stepping on the Gas Again</h2>
In the Q1 balance sheet, construction in progress rose from 29.7 billion yuan at the beginning of the year to 34.9 billion yuan, an increase of 5.2 billion yuan in a single quarter. Bonds payable skyrocketed from 3.4 billion yuan to 11.3 billion yuan, with 8 billion yuan in bonds issued in Q1. The Hungary factory has completed equipment debugging and is about to start production. The over-100GWh energy storage base in Jining, Shandong, is advancing.
CATL exercised restraint in expanding capacity during 2023-2024. In every investor interaction, they repeatedly emphasized &#34;caution.&#34;
That word has now disappeared.
CATL Board Secretary Jiang Li stated that gradual capacity expansion began in the second half of 2024. CATL was also the first in the industry to spot signs of market recovery. Passenger car penetration has surpassed 50%, significantly increasing certainty. Commercial vehicles have passed the cost inflection point, with substantial volumes in heavy truck logistics. Domestic energy storage has been activated by capacity-based electricity pricing policies and can truly become a money-making tool. The demand for energy storage in AI data centers is highly certain, with a single data center potentially requiring 15 to 20GWh of supporting storage capacity.
Management revealed that the global market for power batteries plus energy storage could reach 4TWh by 2030, with a compound annual growth rate exceeding 25% to 30% in the coming years.
4TWh. Global power battery usage in 2025 is approximately 1,187GWh. This represents more than a tripling in five years.
This figure explains all of CATL's current moves. Issuing bonds to reserve funds, expanding investment limits to hedge against declining deposit returns, accelerating supply chain investments, and orderly advancing Phase II of the Hungary facility. A company with annual profits exceeding 70 billion yuan is not merely enjoying a bountiful harvest today; it is building infrastructure for a market that will be several times larger.
CATL is not the only one smelling opportunity. BYD launched supercharging batteries this year, EVE Energy and Hithium are aggressively expanding capacity in the energy storage sector, while LG and Samsung SDI are rushing to build capacity in North America. Jiang Li also noted that after BYD followed the supercharging route, many original equipment manufacturers (OEMs) approached CATL to discuss further cooperation. Competitors helped educate the market for CATL.
This round of lithium battery capacity expansion differs fundamentally from the cycle of 2021-2022. The driver of the previous round was singular: passenger car penetration surged from 15% to 30%, with everyone betting on the same direction, retreating together when the tide receded. This round's drivers are diversified: penetration rates, battery capacity per vehicle, commercial vehicles, energy storage, and data centers—all five lines overlapping in the same window period. Diversification means less vulnerability to a single variable, but it also implies that the true slope of each line remains to be verified.
CATL's judgment is: the new cycle has already begun, and there is no time to wait. Next week, CATL will also unveil entirely new technologies, products, and ecosystems to seek breakthroughs in capturing more market share.
Establishing a Time Resources Group with a registered capital of 30 billion yuan to integrate years of investments in key minerals such as lithium, nickel, and phosphorus into a specialized operating platform, and inviting Chen Jinghe, founder of Zijin Mining, as a company advisor, are all measures taken to welcome the next wave of lithium battery explosion while further solidifying the foundation of supply chain security.
For the lithium battery industry, when the world's largest shipper ends its restraint and resumes large-scale bets on capacity, other players must answer one question: follow or not? Those who followed the wrong path in the previous round are still digesting excess capacity.

300750

03750

Maintaining high growth through 2030

- Lithium carbonate prices have surged from under 60,000 yuan per ton to over 150,000 in just a year, raising concerns about the profitability of leading battery manufacturers like CATL.  
- CATL's Q1 report exceeded market expectations, showcasing a 52% year-on-year revenue growth, with total sales exceeding 200 GWh, while maintaining stable gross margins despite rising raw material costs.  
- The company anticipates robust market growth, expecting the global power battery and energy storage market to reach 4 TWh by 2030, indicating a strategic shift to capitalize on expanding market opportunities.

Off-Season Shipments Exceed 200GWh as CATL Hits the Gas