CATL shares plunged after the company reported slower-than-expected profit growth, as China’s battery champion reckoned with intensifying domestic competition and EV price wars.
Its stock has nearly halved since May, as investors fret over expiring tax carve-outs and a trend dubbed “de-CATLization,” whereby former customers like Xiaomi and Li Auto source batteries from cheaper alternatives and plan to develop them in-house.
Beyond domestic challenges, CATL is also scrambling to build more plants in Europe to avoid running afoul of increasing EU protectionism. The “China decoupling story” is “only accelerating,” a UBS analyst said: “Full China battery and electrical equipment supply chain dependence is no more palatable than full Saudi Arabia or Middle East oil dependence was… 30 years ago.”
— Brendan Ruberry