[SMM Analysis] Cutting 6-series, moving away from CATL: Behind the buzz in August's auto market, ternary is being repriced

In the August auto market report card, the most telling indicator may not be any blockbuster model with monthly sales of 100,000, but rather the stumble of a flagship.

The Li Auto L9 delivered 4,158 units in August. That figure alone isn't bad, but viewed over a longer horizon it's glaring: 6,106 units in June, down by a third in two months; cumulative deliveries in the first eight months of this year came to less than 20,000 units, only about half of the same period last year. As the earliest flagship in China to make large-battery range-extended technology a mainstream route, the L9's 72.7-kWh ternary battery represents one of the most respectable use cases for ternary cathode materials in the passenger vehicle market. Its temporary stall is not just a product-cycle issue for Li Auto alone.

In the same month, two other layers of the industry chain were also making moves with deeper implications for ternary. On one side, battery leader CATL was reported to be facing declining ternary orders in the coming months, with 6-series volume cuts already confirmed; on the other, automakers were lining up to "de-CATL-ize," with Xiaomi Pengcheng switching entirely to battery cells from Sunwoda and CALB, and Li Auto increasing its stake in Sunwoda to become the second-largest shareholder. Taken together, end-use demand, battery configuration, and supply chain maneuvering all repriced ternary this month.

August auto market: strong headline numbers, growth that bypassed ternary

The CPCA released its official August monthly report today, and the headline figures were not bad. Wholesale passenger NEVs reached 1.51 million units, up 16.4% YoY; retail penetration hit 65.2%, another record high; exports totaled 518,000 units, up 154.7% YoY. The wholesale growth rate was 26.5 percentage points higher than retail growth, meaning the portion that couldn't be sold domestically was fully absorbed by exports.

But for those working with ternary, the "ternary content" of August's growth declined.

By powertrain route, wholesale BEVs reached 1.032 million units, up 25.9% YoY, accounting for 68.3% of NEVs; narrow plug-in hybrids totaled 386,000 units, up 3.1%; range-extended vehicles came to just 93,000 units, down 10.9% YoY, with their share shrinking to 6.1%. Range-extended was the only one of the three major routes to decline, a fact that has been repeatedly confirmed over the past few months, and August merely reinforced it once again. Range-extended is precisely where large ternary batteries are most concentrated—mainstream models like the Li Auto L-series and AITO M8 and M9 are basically all equipped with ternary packs starting at around 50 kWh, and the new-generation flagships have already been configured to 70 kWh or more. When range-extended volumes shrink, ternary bleeds directly.

Exports have doubled every month this year. In August, BEVs accounted for 63.4% of NEV exports, and 56.5% of BEV exports were A00 and A0 segment small cars, compared with only 45.2% in the same period last year. In other words, most of the surge in exports is being driven by small LFP vehicles. On the domestic sales side, the best-performing segment in pure electric vehicles is the A0 class, up 12.2% YoY.

These structural changes, when transmitted to the battery cell level, show up in the data comparison: in August, SMM ternary power battery cell production rose only 3.6% MoM, while LFP power battery cell production rose 14% MoM. LFP's share of power batteries has climbed from 66% in the same period last year to 76%. The growth structure is systematically bypassing ternary.

CATL's 6-series cuts: what the market sees is auxiliary materials, but the real cause lies at the end-user level

After news of CATL's ternary order cuts spread, the market quickly converged on an explanation centered on auxiliary material shortages: since Q3, copper foil supply has been tight, battery manufacturers' output has been constrained, limited materials have been prioritized for energy storage and commercial vehicles, and ternary production schedules have had to be pushed back. However, the auxiliary material shortage affects both technology routes equally, yet the squeezed share has fallen specifically on ternary. This direction is not determined by auxiliary materials, but by demand.

The weakness in ternary battery cells reflects the fact that sales of high-end models such as extended-range vehicles have fallen short of expectations. Li Auto L9's cumulative sales in the first eight months were halved YoY; AITO M8 dropped from monthly sales of over 20,000 units last year to around 2,000-3,000 units this year, and the facelift has switched entirely to LFP batteries across the lineup; AITO M7 declined MoM, and Seres' August wholesale sales were halved YoY; Avatr and IM, the two brands with the highest ternary share, fell 23.5% and 6.2% YoY respectively in August. The 6-series is the main material for these extended-range large batteries, and with volume declines across the board at the model level, 6-series orders themselves are contracting.

Even if auxiliary material supply were ample, 6-series production schedules would be difficult to sustain. Ternary had ample stockpiling in the earlier period, and battery cell manufacturers have already been proactively slowing the pace to digest inventories; CATL's overall Q3 business is not bad either, only the portion allocated to ternary is weak. The auxiliary material shortage brought this round of cuts to the surface ahead of schedule, and conveniently gave the market a ready-made explanation. If the cuts were merely an auxiliary material issue, orders should rebound after supply chain recovery; but if it is a demand issue, it will not reverse on its own. This round of 6-series cuts is the result of transmission from end-user models all the way to battery cell production schedules, and will not end just because auxiliary material supply eases, nor will it reverse because the auto market recovers in a particular month. The real turning point will have to wait for high-end models to regain volume.

De-CATL-ization: automakers' battle to defend profits

Automakers are collectively trimming their battery supplier lists.

The two most emblematic moves both occurred in the past week: the Xiaomi Pengcheng series launched on September 7 is equipped entirely with battery cells from Sunwoda and CALB, with CATL completely absent; three days ago, Li Auto announced a 2.65 billion yuan capital increase in SEVB, taking an 11.17% stake to become the second-largest shareholder, while the all-new L8 launched in June has already switched entirely to SEVB battery cells across the lineup. Going further back, NIO ended its collaboration with CATL in the solid-state battery field and shifted to in-house R&D, the main XPeng MONA versions use CALB, and some AITO M6 versions have introduced Gotion High-tech.

Automakers’ reasons boil down to two.

The first is profit. In H1 this year, CATL’s net profit attributable to the parent was 43.284 billion yuan, while 15 mainstream automakers combined made just over 21 billion yuan in the same period. One battery maker’s profit was twice the total of the entire vehicle industry. For a 200,000-yuan car, the battery accounts for 30% to 40% of the cost. Automakers work through the entire chain of R&D, plant construction, and marketing, yet earn only 3,000 yuan per car, with an industry average net margin of 1.5%. Under this structure, second-tier battery cells are 10% to 15% cheaper than CATL’s. Switching suppliers for a volume model can save 2,000 to 3,000 yuan per vehicle.

The second is bargaining power. Lithium carbonate has more than doubled from its low point this year, so cost pressure was already heavy. From September 1, a 2% consumption tax was imposed on lithium batteries, rising to 4% in 2027, while batteries produced and used in-house can be exempted or credited. The policy effectively signals the direction of automakers’ in-house development. A more direct trigger is delivery security. Orders for the new-generation Li Auto MEGA exceeded expectations, but CATL’s 5C ternary lithium battery reserves are about to run out, and customers who lock in orders later can only switch to in-house batteries. Whether flagship models have enough batteries and which month delivery falls in is no longer up to automakers alone.

But this trend should not be overestimated. High-end flagship models above 300,000 yuan still rely on the technical endorsement of the Qilin battery, and the technology tax automakers pay is still being paid. In the year when the outcry was loudest, CATL’s share of passenger vehicle installations in China actually rebounded to 50.1% in Q1, returning to half the market for the first time in five years.

Ternary is an option for specific scenarios

The dilemma for ternary has never been disappearance, but becoming a choice for specific scenarios. LFP substitution is compressing ternary’s applicable boundaries toward the high end, while supply chain migration is amplifying uncertainty on the client side. Support still exists. High-end models such as the AITO M9, NIO ES8, and Zeekr have held the base, rising vehicle battery capacity has partially offset the decline in volume, and mid-to-large vehicles in exports are also providing marginal growth.

Several indicators are worth watching going forward: first, when the extended-range market stabilizes, such as the pace of Xiaomi Pengcheng’s volume ramp-up and the success of the Li Auto L9 and AITO M8 generational updates; second, whether the export structure can upgrade from small cars to mid-to-large vehicles; third, how quickly Sunwoda, CALB, and others can ramp up their own supply chains after taking over ternary orders.

SMM Ternary Analyst Wang Yizhou

2026.9.8