"Truck electrification" will offset the slowdown in passenger vehicles and become an important support for CATL's business

The market's attention is overly focused on the slowing growth of the electric passenger vehicle market, potentially overlooking the emerging "second growth curve" - the electrification of commercial trucks.

On November 27th, according to news from the Chasing Wind Trading Platform, Morgan Stanley stated in its latest research report that the electric heavy-duty truck (eHDT) and light-duty truck (eLDT) markets are expanding at an astonishing rate, which will effectively offset the weakness in the passenger vehicle market and become the core pillar of CATL's business growth in the coming years.

Morgan Stanley noted that the electrification of trucks, especially in the heavy-duty truck sector, is showing explosive growth far exceeding that of passenger vehicles. In October 2025, the sales of electric heavy-duty trucks in China surged 144% year-on-year, with a penetration rate reaching as high as 29%.

At the same time, the electric light-duty truck market is also not to be underestimated, with its penetration rate expected to rapidly increase from 10% in 2025 to 38% in 2027, corresponding battery demand will soar from 30 GWh to 150 GWh, making it a highly certain incremental market.

Based on the strong performance of the truck market, Morgan Stanley's report predicts that CATL's electric vehicle battery business will achieve a 23% year-on-year growth in 2026. This strong expectation is the key logic supporting its "overweight" rating and a 31% upside potential.

The momentum of heavy-duty truck electrification is fierce: penetration rate approaching 30%, may reach 35% next year

Data does not lie; the electric heavy-duty truck market is experiencing an unstoppable growth wave.

According to Morgan Stanley's report data, in October 2025, the monthly sales of electric heavy-duty trucks in China achieved an astonishing year-on-year growth of 144%.

Morgan Stanley believes that what is even more noteworthy is its penetration rate. The penetration rate of electric heavy-duty trucks that month has already reached about 29%, meaning that for every three heavy-duty trucks sold, one is electric. This speed far exceeds the general market expectations.

Based on this strong trend, the report predicts that the penetration rate of electric heavy-duty trucks will further increase to 35% in 2026. For battery suppliers, this is a golden track of simultaneous volume and price growth.

Light-duty truck electrification follows closely: battery demand will see explosive growth in the next three years

If heavy-duty trucks are the "pioneers," then light-duty trucks are the soon-to-explode "main force." Morgan Stanley stated that in October 2025, the sales of electric light-duty trucks grew by 40% year-on-year, while the cumulative sales from the beginning of the year to now have increased by as much as 92%.

Morgan Stanley noted that although the penetration rate in October fell from the peak in August to 8.7%, this was mainly due to the rapid growth in the third quarter. Looking ahead, the growth path of electric light-duty trucks will replicate the successful trajectory of electric passenger vehicles and heavy-duty trucks. The report provides clear forecasts:

Penetration rate forecast: 10% in 2025, 25% in 2026, and reaching 38% in 2027.

Battery demand forecast: Corresponding to the penetration rate, the battery demand brought by electric light-duty trucks will increase from 30 GWh in 2025 to 95 GWh in 2026, and further rise to 150 GWh in 2027

CATL Benefits Significantly

One of the biggest beneficiaries of the wave of truck electrification is undoubtedly CATL, which holds a leading position.

JP Morgan clearly pointed out that the acceleration of truck electrification in China will effectively offset the negative impact brought by the slowdown in electric passenger vehicle growth next year. CATL's leading position in technological innovation and market share will allow it to fully benefit from the long-term trend of truck electrification.

Morgan Stanley expects that truck electrification will help CATL achieve a 23% year-on-year growth in its electric vehicle battery business by 2025. In the current market context, where there are widespread concerns about growth prospects, this forecast stands out particularly.

This also forms the cornerstone for Morgan Stanley to maintain CATL's "Overweight" rating and a target price of RMB 490.00, which implies a potential upside of 31% compared to the stock price of RMB 372.82 at the time the report was released