CATL's European Storage Pact Lands as Morgan Stanley Cuts Its Rating
Published on 10/28/2026 at 05:50 | Editorial boerse-global.de
CATL has signed a letter of intent with German firm INTILION covering 3 GWh of energy storage systems across Germany, Switzerland and Austria over five years, the company said. The agreement spans grid-connected projects as well as commercial and industrial applications, using systems CATL markets under the TENER name.
The deal lands at an awkward moment. Morgan Stanley downgraded the Hong Kong-listed shares from "Buy" to "Market Weight" yesterday, according to media reports, cutting its price target to 390 HK$ from 705 HK$. The broker cited a weaker-than-expected product mix and disappointing profitability. The stock fell 2.1% on the day.
Revenue Outpaces Earnings
The downgrade puts a spotlight on a gap that has been widening in CATL's numbers. In its already-published third-quarter 2026 figures, revenue climbed 58.58% year on year, while net profit attributable to shareholders rose just 14.54% — and slipped 5.77% compared with the previous quarter.
That divergence is the crux of the bear case. More business alone is unlikely to be enough to argue for a recovery; the question is whether CATL can convert additional volume into convincing earnings. The storage pact, in other words, is a possible building block for future business rather than proof of improved earning power.
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A Busy Stretch of Announcements
The INTILION memorandum, signed yesterday, is one of several agreements CATL has rolled out in quick succession. On 19 October the company struck a strategic partnership with Huaihe Energy covering energy storage, renewable energy projects and power-system development, alongside electrification of mining and transport.
Two days later, a strategic agreement with the Shaanxi Transportation Holding Group added storage projects plus electrification of commercial vehicles, charging and battery-swap infrastructure, and battery recycling. Among the plans is a swap network for heavy trucks along Shaanxi's highway grid.
Solid-State Ambitions and Swap Rollout
On the technology front, CATL said yesterday in response to an investor question on the Shenzhen Stock Exchange platform that its solid-state battery technology could reach small-series production by 2027, according to media reports.
Heavy trucks are getting attention too. CATL unveiled its Tianxing II battery-swap solution and the Qiji system on 20 October. The product was already in series production at launch, according to the company, with initial agreements covering 13,000 vehicles. Reuters reported that the Qiji system can swap a truck battery in roughly five minutes. CATL aims to have 900 heavy-truck swap stations operating in China by the end of 2026, rising to 2,000 by 2027.
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What Would Change the Story
For investors, the European storage tie-up sketches out a multi-year opportunity but does not yet represent realized earnings. Should the memorandum turn into concrete projects and deliveries, it could open up additional business; a more favorable valuation would also require that business to support earnings.
The risk is that even a successful expansion fails to settle the profit concerns. If the product mix stays weaker than expected, higher revenue could once again coincide with less dynamic earnings growth — precisely the possibility that gives the downgrade its weight. The next concrete test is progress in converting the INTILION letter of intent into actual projects, backed by operating results that push back against the profitability doubts.
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