"Ningde Times" Leads the Way in Securing Tens of Billions: Will 2025 Also Be a "Golden Year" for Battery Manufacturers?

"Battery producers are earning even more than NEV manufacturers."

As this industry logic has almost become the default thinking pattern in the NEV sector, Tier 1 power battery producers have been reaping substantial profits amid widespread admiration.

Meanwhile, as the cost of battery-grade lithium carbonate has plummeted, automakers have been intensifying their in-house battery R&D efforts, prompting many voices to declare, "Battery producers are no longer as profitable."

However, the reality is that battery producers have consistently ended each year on a high note.

2025 may prove to be no exception.

Outperforming OEMs, CATL's Q1 net profit surpassed 13.9 billion yuan!

Everyone acknowledges that CATL is no longer what it used to be, as it has been raking in billions year after year.

Moreover, CATL's net profit has doubled annually: its net profit attributable to shareholders surged from 15.931 billion yuan in 2021 to 30.729 billion yuan in 2022, then to 44.121 billion yuan in 2023, and finally to 50.745 billion yuan in 2024.

On April 14, CATL released its Q1 2025 financial report, which revealed that during the reporting period, CATL's revenue reached 84.7 billion yuan, and its net profit exceeded the 13.9 billion yuan threshold. Its quarterly net profit was close to the full-year net profit of 2021, with a YoY increase of over 30%, and its gross profit margin continued to climb on a QoQ basis.

Additionally, CATL maintained its strong R&D investment, with R&D expenditure exceeding 4.8 billion yuan in Q1 2025. Meanwhile, the company's operating cash flow reached 32.87 billion yuan in the first quarter.

According to Gasgoo, since its A-share listing in 2018, CATL has distributed dividends and repurchased shares totaling nearly 60 billion yuan, with increasing shareholder returns. Recently, the company announced plans to repurchase shares worth 4-8 billion yuan.

It cannot be denied that within the power battery sector, there remains a significant wealth gap among battery producers. While CATL's net profit in a single quarter exceeded 10 billion yuan, EVE's net profit during the same period just surpassed 1 billion yuan.

Financial report data shows that in Q1 2025, EVE achieved operating revenue of 12.796 billion yuan, up 37.34% YoY, and a net profit attributable to shareholders of 1.101 billion yuan, up 3.32% YoY.

Although EVE's Q1 financial performance lags far behind that of leading battery producer CATL, it is still commendable. Securities Star also believes that the various data indicators disclosed in EVE's financial report this time are satisfactory.

However, it is worth noting that compared to the same period last year, EVE's gross profit margin in Q1 2025 was 17.16%, down 0.39 percentage points, indicating that the company is facing certain challenges in cost control.Additionally, the company's net profit margin was 9.10%, also showing a decline compared to the same period last year. These figures indicate that while the company's operating revenue increased, its profitability and profit margin declined.

Compared to EVE's net profit of 1 billion yuan, Sunwoda's net profit in the same period only exceeded one-third of the former.

According to financial report data, Sunwoda achieved operating revenue of 12.289 billion yuan in Q1 2025, up 11.97% YoY; net profit was 386 million yuan, up 21.23% YoY.

Pacific Securities recently conducted research on Sunwoda and believes that, in terms of profitability, Sunwoda's comprehensive gross profit margin was 15.18% in 2024, up 0.58 percentage points YoY. Among them, the gross profit margin of consumer batteries was 17.65% (+2.74 percentage points), benefiting from an increase in the self-supply rate of battery cells. In Q1 2025, the gross profit margin further increased to 16.88%, up 0.92 percentage points YoY.

From the perspectives of R&D and capital expenditure, Sunwoda is still in an expansion phase: in 2024, the company invested 3.33 billion yuan in R&D. In Q1 2025, R&D expenses were 932 million yuan (+31.28%), with a focus on cutting-edge technologies such as fast-charging batteries and solid-state batteries. In terms of capital expenditure, recent investments were mainly used for the construction of bases and equipment procurement in Vietnam and Thailand, accelerating the global layout of production capacity.

Pacific Securities expects Sunwoda's net profit attributable to shareholders to be 2.158 billion, 2.815 billion, and 3.753 billion yuan in 2025-2027, respectively.

Turning to Gotion High-tech, the company achieved operating revenue of 9.055 billion yuan in Q1 2025, up 20.61% YoY; net profit attributable to shareholders was 101 million yuan, up 45.55% YoY. R&D expenses in the same period were 484 million yuan, up 11.82% YoY.

It is worth noting that Farasis Energy achieved operating revenue of 2.325 billion yuan in Q1 2025, with a net loss attributable to shareholders of -152 million yuan, representing a 29.82% reduction in losses YoY.

Multiple Growth Avenues for Battery Manufacturers

It is a fact that battery manufacturers are making money.

In the NEV industry chain, top-tier battery enterprises have held sway for a certain period, controlling battery supply and possessing strong bargaining power over automakers. For example, in the past, a top-tier battery manufacturer, as a power battery supplier, determined whether an automaker could increase production based on its battery supply, allowing for some room for power battery price increases and subsequent profit growth.

However, it should also be mentioned that battery manufacturers' customers are not limited to NEV manufacturers.

According to the Q1 2025 financial report, the battery swapping business has become a new strategic growth point for CATL.CATL recently reached a cooperation agreement with Sinopec Group, with both parties planning to jointly build no less than 500 battery swapping stations by 2025, and aiming to expand to 10,000 stations in the long term.

Additionally, CATL has also formed a strategic partnership with NIO. NIO's Firefly brand will introduce CATL's Choco-Swap battery swapping standards and network at an appropriate time. The two companies' battery swapping networks will adopt a "dual-network parallel" model, jointly promoting the standardization of battery swapping technology. Meanwhile, CATL has invested 2.5 billion yuan in NIO Energy, which is the operator of NIO's battery swapping stations and charging pile network.

It is reported that CATL's goal for 2025 is to build 1,000 battery swapping stations per year, covering more than 30 cities. This means that CATL will deploy battery swapping infrastructure at twice the speed of NIO.

Before the Shanghai Auto Show, CATL collaborated with five automakers, including FAW, Changan, BAIC, Chery, and GAC, to launch 10 Choco-Swap battery swapping models for the C-end market, with 9 of them set to be released within the year. FAW Hongqi introduced its first Choco-Swap B+ class sedan, the EH7; Changan launched the Qiyuan A05, Qiyuan A07, and Shenlan SL03; Chery unveiled the iCAR V23 boxy SUV; and GAC Group announced the Aion UT, Aion RT, Aion V Tyrannosaurus, and an A-class SUV, all of which will feature Choco-Swap battery swapping.

The initial investment in the battery swapping business is substantial, and there are not many battery manufacturers in China, like CATL, that are making such large-scale investments in this sector.

However, it is noteworthy that, as of now, the major battery manufacturers in China have shown significant progress in the ESS sector.

In the ESS market, CATL has also achieved important breakthroughs. It is reported that CATL has become the preferred BESS supplier for the UAE's RTC 19GWh data center project. Additionally, the company, in collaboration with Quinbrook, will deploy the world's first 8-hour BESS, the EnerQB, in a 24GWh project in Australia.

According to SNE Research data, in 2024, CATL ranked first globally in ESS battery shipments with a market share of 36.5%, maintaining the top position for four consecutive years from 2021 to 2024.

However, it is also worth mentioning that in 2024, CATL's ESS segment generated revenue of 57.29 billion yuan. According to the 2024 ESS battery shipment rankings released by the Zhongguancun ESS Industry Technology Alliance in collaboration with three other institutions, CATL and EVE ranked first and second, respectively. In terms of revenue growth, CATL's ESS business declined by about 4% last year, making it the only lithium battery company among the top six to experience negative revenue growth.

According to a report from CNR.cn, as major competitors of CATL, enterprises such as EVE and Hithium saw higher growth rates in ESS battery shipments (sales) last year compared to CATL. It is reported that EVE's ESS segment shipped 50.45 GWh, representing a 91.9% YoY increase; Hithium's ESS segment achieved total sales of 33.6 GWh, marking an 88.7% increase. CALB's revenue growth in the ESS business reached 72.6% last year.

For EVE, according to the 2024 global ESS battery enterprise shipment rankings released by InfoLink, a global research institute, EVE rose to second place globally.

It was reported that in April last year, EVE announced collaborations with multiple domestic enterprises, including Haide Smart Energy, LinYang Energy Storage, and Jinko Energy Storage, with a total cooperation scale reaching 19 GWh. Regarding overseas clients, EVE secured partnerships with overseas clients such as Powin and AESI in June and September 2024, with supply scales of 15 GWh and 19.5 GWh, respectively.

It was reported that on February 7, EVE Power, a subsidiary of EVE, signed a strategic cooperation agreement with HyperStrong, agreeing to supply 50 GWh of ESS battery cells from 2025 to 2027. Moreover, both parties committed to collaborating on expanding overseas market operations based on their cooperation in the domestic market and actively exploring in-depth cooperation in capacity and other areas.

Additionally, as a core energy component, power batteries are reshaping the emerging industrial landscape through their applications in the low-altitude economy and embodied intelligence sectors.

In the low-altitude economy sector, devices such as electric vertical takeoff and landing aircraft (eVTOL) and drones impose stringent requirements on battery technology, necessitating ultra-high energy density to enhance driving range, as well as takeoff and landing power exceeding 10C and excellent safety performance. Top-tier enterprises like CATL and EVE are accelerating their deployments.

Top-tier enterprises like CATL and EVE are accelerating their deployments. In August last year, CATL signed a strategic investment and cooperation agreement with Autoflight to jointly conduct R&D on eVTOL aviation batteries.

EVE's eVTOL integrated solution achieves an energy density of 320 Wh/kg, enabling 80% charging within 10 minutes, 10C output capability throughout the entire life cycle, and the ability to withstand over 7,000 cycles without experiencing system-level thermal runaway issues. In March this year, EVE announced that it had received a supplier nomination development notice from XPeng AEROHT, with the former to provide low-voltage lithium batteries for XPeng AEROHT's next-generation principle prototype.

Similarly, CALB provided 9-series high-nickel/silicon system power batteries for the development of XPeng Motors' first global electric vertical takeoff and landing flying car, the AEROHT X3.

According to its financial report, Farasis Energy has forged in-depth partnerships with leading eVTOL companies in the US and renowned domestic flying car clients, including Shanghai EHang, AEROFUGIA, and Zero Gravity.

In the field of embodied intelligence, power batteries have emerged as a critical component enabling humanoid robots to achieve autonomous movement.

Farasis Energy also stated in its financial report that it has actively engaged with multiple leading industry producers, and is expected to make significant progress in cooperation and secure orders from key domestic clients in 2025.

Advancing Global Expansion: From Breakthrough to Deepening

It is not uncommon to discuss the global market expansion of domestic power battery products in 2025. Today, after years of efforts, some domestic battery producers have begun to gradually reap the rewards.

The intensifying competition in the domestic market is one of the most important internal drivers for producers to go global.

With the sustained growth of the NEV and ESS markets, China has become the world's largest lithium battery consumer market for several consecutive years. However, the industry is facing severe "cut-throat competition," and the decline in raw material prices has triggered a "price war" in the power battery industry chain. Against this backdrop, enterprises are seeking overseas markets to alleviate competitive pressures and expand profit margins.

In addition, the enhanced competitiveness of Chinese power battery enterprises themselves is a key pillar for achieving overseas expansion.

After years of development, domestic battery producers have continuously invested in technological R&D, achieving breakthroughs in key indicators such as battery energy density, safety, and cycle life. For example, products like CATL's Shenxing battery and BYD's LFP blade battery possess international competitiveness in terms of performance. Furthermore, China's well-established industry chain system provides enterprises with cost advantages in raw material supply, manufacturing, and other links, enabling them to participate in international competition with more cost-effective products.

According to SNE data, after ranking first globally in power battery usage for eight consecutive years from 2017 to 2024, CATL achieved a global market share of 38% in January-February 2025, with a European market share as high as 43%, up 8 percentage points YoY, and leading the second-place competitor by 13 percentage points.

For the full year of 2024, the 2024 power battery installation rankings released by SNE Research showed that the usage of EV batteries in overseas markets reached 361.4 GWh, up 13.1% YoY. Among them, CATL secured the top position in overseas markets with a 27% market share. In that year, CATL's power battery installations in overseas markets amounted to 97.4 GWh, with a YoY increase of 10.9%.

It is worth mentioning that this marks the first time CATL has secured the top position in overseas market share on SNE Research's rankings.According to the list, in 2023, the difference in power battery installations between CATL and LG Energy Solution was minimal, with CATL at 87.8 GWh and LG Energy Solution at 87.9 GWh. However, in 2024, the latter's installations only increased by 1% YoY, causing it to lose its top position in overseas market share.

Additionally, BYD's overseas installations saw a YoY growth rate of 117%, while CALB's reached 294%, ranking sixth and tenth on the list, respectively.

Also based on SNE Research data, in 2024, Gotion High-tech ranked third globally in LFP installations, with a market share of 6.18%. Its global lithium power battery installations increased by 73.8% YoY, with a market share of 3.2%, ranking eighth.

Image source: Gotion High-tech

BOCOM International Securities conducted research on Gotion High-tech and expressed optimism about the company's overseas capacity layout and profitability improvement. It believes that Volkswagen's NEV business in mainland China is expected to bring incremental revenue to Gotion High-tech by 2026. The company continues to collaborate with Volkswagen on technological upgrades and new vehicle launch plans, currently mainly supporting Volkswagen's European business. BOCOM International Securities expects Volkswagen's business in mainland China to bring incremental revenue to the company by 2026.

According to BOCOM International Securities' analysis, Gotion High-tech's revenue from regions outside mainland China in 2024 increased significantly by 71.2% YoY (mainland China: -3.1%), with the proportion of overseas revenue rising to 31.1% (2023: 20.3%). The construction of overseas capacity continues to advance, with the Vietnam factory having commenced production smoothly, and the Morocco base (20 GWh) and Slovakia base (20 GWh) expected to commence production in 2026 and 2027, respectively.

However, under the current international trade situation, expanding overseas markets also faces numerous challenges.

Among them, the complex and stringent policies and regulations in overseas markets pose many obstacles for power battery enterprises to go global. In terms of land approval, foreign procedures are cumbersome, with changes in land use requiring not only local government approval but also possibly parliamentary hearings. During the subsequent construction phase, there are also numerous demands from local residents regarding environmental protection, employment, and other aspects.

It is reported that it takes about a year and a half from approval to production for domestic factory construction, while this period is significantly extended overseas. In terms of product certification and standards, there are differences among various countries and regions, requiring enterprises to invest substantial time and funds to meet various certification requirements, increasing the difficulty and cost of entering the market.

In addition, supply chain support issues also pose a major challenge. Raw materials required for battery manufacturing, such as cathodes, anodes, and electrolytes, are difficult to find mature support in some overseas regions. Even if available, the costs are relatively high, making it difficult to localize the supply chain.Meanwhile, the product recycling system is not yet well-established overseas, which is a crucial aspect of sustainable development. How to build an efficient recycling system has become a challenge for enterprises.

In addition, the electrification progress and actual demand in some overseas markets have fallen short of expectations. The global expansion process of enterprises is often delayed due to various complex issues. After the capacity is established, they may face the dilemma of insufficient local market demand, leading to a significant increase in operational pressure. For example, SIRO, a joint venture of Farasis Energy in Turkey, encountered difficulties in the early stages due to various challenges. However, according to Farasis Energy's financial report, the company stated that in overseas markets, its joint venture Siro in Turkey has basically completed the ramp-up of its 6GWh capacity and entered a stable production phase.

Facing the complex overseas market environment, Chinese power battery enterprises are actively exploring countermeasures. They continue to invest in technological innovation to enhance product performance and quality, meeting the diverse needs of different markets for batteries. By establishing cooperative relationships with local suppliers, they gradually promote the localization of the supply chain, reducing supply risks and costs. They also strengthen in-depth cooperation with local automakers, providing customized battery solutions based on their product planning and market positioning, thereby improving product adaptability and market competitiveness.