CATL earned 18.5 billion yuan—but automakers no longer want to work for the 'King of Ningde'

CATL is effectively ‘killing off’ its former self. On October 20, CATL released its third-quarter 2025 financial report—a document that evokes both contradiction and deep reflection. On one hand, CATL’s profit-generating capability is nothing short of extraordinary: even amid widespread perceptions of a challenging market environment and tough business conditions, its net profit growth exceeded 40%. On the other hand, CATL’s Q3 revenue stood at RMB 104.186 billion, representing only a 12.9% year-on-year increase—far slower than its previous ‘rocket-speed’ growth, where doubling year-on-year was commonplace. This dramatic slowdown has sparked widespread concern: Has CATL hit a bottleneck? Has it truly lost momentum? But hold off on drawing conclusions just yet. Behind these figures, CATL is actively switching lanes. In the past, CATL competed domestically—leveling up rapidly with the singular goal of scaling up and dominating the Chinese market. That phase is now nearly complete. Today, CATL is embarking on its ‘second life’: its game map has shifted from ‘domestic’ to ‘global’; its focus is expanding from power batteries into energy storage; and its strategy is evolving from selling ‘products’ toward building an integrated ‘ecosystem’—including battery-swapping networks, integrated photovoltaic–storage–charging–inspection infrastructure, pilot programs for battery leasing (‘battery banks’), and battery asset management. So far this year, CATL’s stock price has surged 49.33%, with its current total market capitalization reaching RMB 1.76 trillion. 01 Behind the RMB 18.5 billion profit in three months The first page of CATL’s latest financial report reveals a striking ‘scissors-gap’ between revenue and profit. Data shows CATL’s revenue growth has slowed markedly: Q3 revenue rose only 12.9% year-on-year, while cumulative growth for the first three quarters decelerated further—to just 9.28%. Compared to its past explosive growth—often exceeding 100%—CATL now appears to have entered a stable, low-growth trajectory. This pace also lags behind the industry average. According to the China Passenger Car Association (CPCA), as of Q3 2025, CATL’s global power battery market share had slipped to 41.7%, its lowest level in five years. By contrast, its peak market share between 2020 and 2021 exceeded 50%—a telling sign that the competitive landscape is loosening. Yet in stark contrast to this ‘stable’ revenue performance stands its ‘explosive’ profit growth: Q3 net profit attributable to shareholders soared 41.21% year-on-year; even after excluding non-recurring gains and losses, net profit growth remained a robust 35.47%. For the first three quarters combined, cumulative net profit growth reached an astonishing 36.2%. In the business world, ‘revenue growth without corresponding profit growth’ is common—but CATL’s rare phenomenon of ‘modest revenue growth paired with soaring profits’ is especially remarkable, particularly within today’s fiercely competitive, price-war-ridden EV industry. So what exactly is happening here? CATL’s slowing revenue growth stems partly from differences in revenue recognition criteria. In Q3, CATL shipped approximately 180 GWh of batteries—but only ~165 GWh were recognized as revenue in its financial statements, leaving a gap of over a dozen GWh. That’s because batteries must be delivered to customers, undergo complex installation and commissioning, and only upon customer acceptance can CATL officially record the sale as ‘revenue’.

Five strategies unveiled by dissecting CATL’s Q3 report to resolve its ‘loss of momentum’ crisis!

Under the latest round of brutal industrial reshuffling—even a powerhouse like CATL cannot escape the ‘loss of momentum’ dilemma. According to CATL’s Q3 report: In the first three quarters of 2023, the company’s revenue and net profit attributable to shareholders totaled RMB 294.677 billion and RMB 31.145 billion, respectively—up 40.1% and 77.05% year-on-year. Although still growing, these represent CATL’s lowest year-on-year growth rates over the past three years. Trends across quarters paint an even grimmer picture. Specifically, CATL’s Q3 revenue growth slowed to just 8.28%—its fourth consecutive quarter of sequential decline and the weakest growth rate in the past 12 quarters. Signs of crisis were already evident in the semi-annual report. Our analysis of the financial statements revealed that CATL’s capacity utilization rate had fallen to its lowest level in three years: just 60.50% in H1 2023—a drop of 20.75 percentage points year-on-year. According to GGII (Gao Gong Lithium Battery Intelligence), CATL’s capacity utilization rose above 70% in Q3—still an improvement over H1, but remaining historically low. If even an industry leader faces such pressure, the challenges—and risks—facing other players are self-evident. The current industrial backdrop is one of intense competition and restructuring, fueled by top-tier capital’s frenzied pursuit of opportunities in the power battery sector. Over the past year-plus, the industry has witnessed repeated mega-projects—each worth tens or even hundreds of billions of yuan. Comprehensive market data indicates that total planned investment across the entire power battery value chain since 2022 has surpassed RMB 2 trillion. The 24Chao team, synthesizing data from brokerage reports and corporate announcements, found that among 17 globally listed battery manufacturers with publicly disclosed capacity plans, their combined installed capacity stood at nearly 1,600 GWh as of end-2022—and their total planned capacity by 2025 reaches a staggering 5,868 GWh. Factoring in additional expansion plans from other global industrial giants, total global power battery capacity by 2025 could easily exceed 8,000 GWh—far outpacing even the most optimistic demand forecasts. The ferocity of industrial competition is further corroborated by drastic price declines. Per Xineluo Information, as of October 19, average prices for prismatic LFP batteries and general prismatic batteries stood at RMB 0.48/W and RMB 0.57/W, respectively—down 41.82% and 38.04% from December 30, 2022. The lowest quoted prices for these two products had already dropped to RMB 0.44/W and RMB 0.53/W. Looking ahead, based on the latest industrial trends and developments, competition in the power battery sector is likely to intensify further. Such dynamics place enormous pressure on enterprises’ strategic acumen, innovation capabilities, capital strength, execution speed, and adaptability. Under these circumstances, the choices and trajectories of industry giants attract intense market scrutiny—each major strategic move or adjustment potentially reshaping the future industrial landscape. Our analysis of data and documents reveals that CATL is enhancing its overall competitiveness through multiple levers: reducing inventory, ramping up R&D investment, strengthening cash generation and financing capacity, accelerating internationalization and vertical integration, and bolstering capital strength.

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China's CATL third-quarter profit growth slowest in nearly two years as competition intensifies

China's CATL third-quarter profit growth slowest in nearly two years as competition intensifies

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