<div id="readability-page-1">While China’s electric vehicle (EV) makers are struggling amid fierce competition, battery giant Contemporary Amperex Technology Ltd (CATL) is consolidating its dominance, building its profits while erecting technological barriers to increase its pricing power. The world’s bestselling power battery maker for nine years in a row, CATL in March reported a net profit of 72.2 billion yuan (US$10.6 billion) for last year, up 42 per cent from a year earlier. The figure is only 8 per cent lower than the combined profits of China’s top four listed carmakers – BYD, Chery, Geely Auto and SAIC – which reported net income of 78.6 billion yuan. CATL earned 2 per cent more profit than the 70.59 billion yuan made by the country’s 11 listed carmakers, including smaller and loss-making players. Comparing CATL to BYD – China’s leading EV maker and also known for its low-cost batteries and strict cost controls – is instructive. In 2025, CATL earned 121 per cent more than BYD, widening from its 26 per cent advantage in 2024, as BYD ended a four-year profit run with a 19 per cent year-on-year slump amid EV price wars. “The EV battery industry, with its high requirement for safety, technology and economies of scale, has formed a higher concentration than downstream car manufacturing, where different companies with different backgrounds have been drawn into much fiercer competition,” said Paul Gong, head of China auto research at UBS. The top three players hold more than 70 per cent of the total market for EV batteries and about 35 per cent in the passenger vehicle segment. CATL’s market share in the domestic EV battery market hit an 18-month high of 50 per cent in January, followed by BYD’s 17 per cent and Gotion’s 6 per cent, according to a report by HSBC Qianhai Securities. With more than 54,000 patents awarded or under application globally as of 2025, CATL serves most of the world’s major carmakers, especially in the market for high-end passenger cars. Concentration and scale were enhancing the pricing power of battery-industry leaders, said Yale Zhang, managing director at consultancy Automotive Foresight in Shanghai.  “The battery is the heart of an EV,” Zhang said. “As battery manufacturing involves strict quality requirements, it’s clear that leaders have a better reputation in this regard than smaller ones.” CATL’s EV batteries contributed nearly 75 per cent of its total revenue last year, with a gross profit margin of 23.8 per cent, exceeding the highest margin among leading carmakers, 20.5 per cent. The giant also outperformed its rivals in profitability, achieving an overall gross margin of 26.27 per cent last year. CALB Group, the fourth-largest domestic EV battery manufacturer, reported a net sales margin of 4.7 per cent last year, though its net profit surged 148 per cent year on year to 834.6 million yuan. EVE Energy, the fifth biggest player, posted an overall margin of 16.17 per cent, despite a 1.44 per cent rise in net profit to 4.13 billion yuan. In the near term, profit concentration is expected to continue amid the energy shock stemming from Middle East conflicts. Gong of UBS said that recent high oil prices had demonstrated the strategic importance of EVs and battery energy storage systems, where Chinese companies led the world. Analysts from HSBC Qianhai projected that CATL’s capacity ramp-up this year was likely to unlock more market-share opportunities, especially in energy storage systems and the European EV battery market. In the long term, the edge that CATL built on the lithium-ion battery – which dominates the current energy storage and EV markets – could fade, as promising new technologies like solid-state batteries could achieve breakthroughs and change the game, said Automotive Foresight’s Zhang. “If the industry were to shift to new batteries rapidly, all players would be back at the starting line,” he said.</div>

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<p>China's EV battery leader, CATL, reported a net profit of 72.2 billion yuan ($10.6 billion) for last year, a 42% increase, while major EV makers like BYD faced profit declines. CATL's market share in the domestic EV battery market reached 50%, with a gross profit margin of 23.8%. Analysts expect CATL to continue gaining market share, particularly in energy storage and the European market, despite potential future competition from new battery technologies. The concentration of profits in the battery industry is expected to persist amid rising oil prices and strategic shifts towards EVs.</p>

How China’s EV battery king CATL powers up profits while EV makers struggle