CATL’s Record Half-Year Masks a Tale of Two Businesses Under Pressure
Published on 07/26/2026 at 06:22 | Redaktion boerse-global.de
The world’s largest battery maker just posted its best-ever half-year profit, yet the numbers that matter most to investors are heading in the wrong direction. CATL’s net income jumped 42 percent in the first six months of 2026, but a closer look at the second quarter reveals the slowest earnings growth in more than a year — and margins are shrinking in both of its core divisions simultaneously.
Growth Decelerates Despite Beating Estimates
Between April and June, CATL generated a net profit of 22.5 billion yuan, up 36.5 percent year-on-year. That comfortably beat the 29.7 percent growth analysts had penciled in, yet it still marked the weakest quarterly expansion since early 2025. Revenue for the period climbed 56.9 percent to 147.8 billion yuan, accelerating from the 52.5 percent gain recorded in the first quarter.
For the full first half, net profit reached 43.3 billion yuan, with an overall gross margin of 23.93 percent. The headline figures remain impressive, but the trajectory is what concerns the market.
Margins Erode Across Both Key Segments
The most telling metric for shareholders lies in CATL’s gross margins, which deteriorated in both its electric-vehicle battery business and its energy-storage division. The EV battery segment — still the company’s largest revenue driver — saw its gross margin fall 1.8 percentage points to 20.6 percent in the first half. The energy-storage battery business fared only slightly better, with margins slipping from 25.5 percent to 24.0 percent over the same period.
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Revenue from EV batteries totaled 192.12 billion yuan in the first six months, up 46.02 percent. The storage division, by contrast, surged 87.54 percent to 53.26 billion yuan, though it started from a much smaller base. That explosive growth is reshaping CATL’s revenue mix: storage accounted for 19 percent of half-year sales, up from 16 percent a year earlier.
Home Market Share Slips, Global Dominance Holds
CATL’s grip on its domestic market is loosening at the edges. In June, the company remained China’s largest battery producer with a 42.70 percent share, but that represented a 3.43 percentage point decline from May. Rival BYD held 18.49 percent of the market.
Globally, the picture remains more commanding. According to SNE Research, CATL controlled 40.2 percent of the worldwide EV battery market between January and May, supplying Tesla, BMW, and Volkswagen. In energy storage, its global share jumped from 26.9 percent to 29.9 percent in the first quarter alone, as lithium-ion storage battery shipments nearly doubled.
Storage Emerges as the Growth Engine
The energy-storage business is increasingly compensating for the maturation of the EV battery market. CATL has accelerated its push into grid-scale storage and renewable energy projects, positioning the division as its primary growth driver. The shift is structural: as China’s EV market matures and government subsidies have been trimmed, domestic demand has softened, while European and other overseas markets continue to boom.
CATL’s international expansion is the strategic answer to that domestic headwind. The company already operates battery plants in Germany and Hungary, and in May it raised $5 billion through a Hong Kong listing, with most of the proceeds earmarked for overseas operations.
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Buyback Plan Signals Confidence
Alongside its results, CATL announced a share buyback program worth between 20 billion and 40 billion yuan. The plan, which requires shareholder approval, involves repurchasing and canceling A-shares over a 12-month period. At the top end of the range, the buyback would consume roughly 10.75 percent of the company’s cash holdings as of June 30.
Stock Hovers Near Key Technical Level
CATL’s shares closed the week at 383.01 yuan in Shenzhen, up 6.39 percent over the previous seven days. That still leaves the stock about 18 percent below its 52-week high of 468.75 yuan, reached in May. The current price sits almost exactly on the 200-day moving average of 385.74 yuan, suggesting the market has largely priced in the mixed signals from slower EV growth and a booming storage business.
How that balance evolves will depend heavily on CATL’s ability to scale its sodium-ion technology and utility-scale storage solutions overseas. For now, the company is navigating two very different trajectories — one slowing, one accelerating — and investors are watching closely to see which one defines the next chapter.
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