"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 amidst much admiration.

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

However, the reality is that every year, battery producers have been closing the year with a smile.

2025 may not be an exception.

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

Everyone says CATL is no longer what it used to be, but it has been raking in billions every year.

Moreover, CATL's annual net profit has doubled: its net profit attributable to shareholders increased 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 showed that during the reporting period, CATL's revenue reached 84.7 billion yuan, and its net profit surpassed the 13.9 billion yuan mark, with the quarterly net profit approaching the total net profit for 2021, up over 30% YoY, and its gross profit margin continued to climb on a QoQ basis.

In addition, CATL's R&D investment remained strong, 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.

Gasgoo learned that since its listing on the A-share market 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 in the power battery sector, there is still a significant wealth gap among battery producers. While CATL's net profit in a single quarter exceeded 10 billion yuan, EVE's net profit in the same period just surpassed 1 billion yuan.

According to financial report data, in Q1 2025, EVE achieved operating revenue of 12.796 billion yuan, up 37.34% YoY; its net profit attributable to shareholders was 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 with 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 having strong bargaining power over automakers. For example, in the past, a top-tier battery manufacturer, as a power battery supplier, had the ability to influence the production volume of automakers depending 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 entered into a strategic partnership with NIO. NIO's Firefly brand will introduce CATL's chocolate battery swapping standards and network at an appropriate time, and both parties' battery swapping networks will adopt a "dual-network parallel" model to jointly promote 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 battery swapping station construction in 2025 is: "1,000 battery swapping stations in one 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 C-end chocolate battery swapping new car models, with 9 of them set to be released within the year. FAW Hongqi introduced its first chocolate B+ level battery swapping sedan, the EH7; Changan Automobile launched the Qiyuan A05, Qiyuan A07, and Shenlan SL03; Chery introduced the iCAR V23 square box; and GAC Group announced that the Aion UT, Aion RT, Aion V Tyrannosaurus, and an A-level SUV will all feature chocolate battery swapping models.

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 deployments in the battery swapping sector.

However, it is noteworthy that, as of now, the deployments of major domestic battery manufacturers in the ESS sector have shown results.

In the ESS market, CATL has also achieved significant 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 sector generated revenue of 57.29 billion yuan. According to the 2024 ESS battery shipment rankings jointly released by the Zhongguancun ESS Industry Technology Alliance and three other institutions, CATL and EVE ranked first and second, respectively. In terms of revenue growth rate, CATL's ESS business declined by about 4% last year, making it the only lithium battery company among the top six with negative revenue growth.

According to CNR, as major competitors of CATL, EVE and Hithium saw higher growth in ESS battery shipments (sales) last year compared to CATL. Specifically, EVE's ESS segment shipped 50.45GWh, up 91.9% YoY; Hithium's ESS segment recorded sales of 33.6GWh, an increase of 88.7%; CALB's ESS business revenue grew by 72.6% last year.

For EVE, according to the 2024 global ESS battery shipment ranking released by research firm InfoLink, EVE jumped to the second place globally.

It was reported that in April last year, EVE announced collaborations with multiple domestic companies including Haide Smart Energy, Linyang ESS, and Jinko ESS, with a total cooperation scale of 19GWh. In terms of overseas clients, EVE reached agreements with Powin and AESI in June and September 2024, respectively, with supply scales of 15GWh and 19.5GWh.

Sources revealed that on February 7, EVE's subsidiary EVE Power signed a strategic cooperation agreement with HyperStrong, committing to supply 50GWh of ESS battery cells from 2025 to 2027. Moreover, both parties pledged to leverage domestic market cooperation as a foundation, jointly explore overseas market opportunities, and actively seek deep collaboration in capacity and other areas.

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

In the low-altitude economy, devices such as electric vertical takeoff and landing aircraft (eVTOL) and drones impose stringent demands on battery technology, requiring not only ultra-high energy density to enhance driving range but also takeoff and landing power exceeding 10C and exceptional safety performance. Top-tier enterprises like CATL and EVE are accelerating their deployments.

Among them, in August last year, CATL signed a strategic investment and cooperation agreement with AutoFlight to jointly develop eVTOL aviation batteries.

EVE's eVTOL integrated solution boasts an energy density of 320Wh/kg, capable of charging 80% in 10 minutes, with a 10C output capability throughout its life cycle, and can withstand over 7,000 cycles without system-level thermal runaway issues. In March this year, EVE announced that it received a supplier development notice from XPeng Huitian to provide the next-generation prototype low-voltage lithium batteries for XPeng Huitian.

Similarly, CALB developed the 9-series high-nickel/silicon power battery for XPeng Motors' global first electric vertical takeoff and landing car — the Huitian X3.

According to its financial report, Farasis Energy has forged in-depth partnerships with leading eVTOL companies in the US and prominent domestic flying car clients, including well-known enterprises such as 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 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, following eight consecutive years (2017-2024) of ranking first globally in power battery usage, CATL achieved a global market share of 38% in January-February 2025, with a particularly high market share of 43% in Europe, up 8 percentage points YoY, and leading the second-place competitor by 13 percentage points.

For the full year of 2024, according to the 2024 power battery installation rankings released by SNE Research, 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, at 87.8 GWh and 87.9 GWh, respectively. 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 recorded a YoY growth rate of 117%, while CALB's reached 294%, ranking sixth and tenth on the list, respectively.

Also based on data from SNE Research, 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 operations. 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 surged by 71.2% YoY (mainland China: -3.1%), with the proportion of overseas revenue increasing to 31.1% (2023: 20.3%). The construction of overseas production capacity continues to advance, with the Vietnam factory having commenced operations smoothly, and the Morocco base (20 GWh) and Slovakia base (20 GWh) expected to commence operations 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. Changes in land use not only require approval from local governments but may also involve 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 operation for domestic factory construction, while this period is significantly prolonged overseas. In terms of product certification and standards, there are differences among various countries and regions. Enterprises need to invest a significant amount of time and capital 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 cathode, anode, and electrolyte, are difficult to find mature support in some overseas regions. Even if there is supply, the cost is 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.

Faced with the complex overseas market environment, Chinese power battery enterprises are actively exploring coping strategies. 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.