On September 15th, shares of Chinese battery giant CATL (SHE: 300750) plummeted 6.16% on the A-share market to close at 316.36 yuan, a fresh one-year low. Its H-shares also fell more than 6% on the Hong Kong exchange, and from the May peak, the pullback now exceeds 32%, erasing roughly 700 billion yuan in combined market value across both listings.

But glance at the first-half results and a starkly different picture emerges. Revenue surged 54.8% year-on-year to 276.9 billion yuan, with net profit attributable to shareholders hitting 43.284 billion yuan—the equivalent of earning 2.4 billion yuan per day. So why the contradiction between stellar earnings and a crashing share price?

The Core Concern: Carmakers No Longer Want to Work for Battery Makers

Guangzhou Automique Group chairman Zeng Qinghong once joked in 2022 that carmakers were working for CATL. That quip has now become an accounting reality. In the first half of this year, the combined net profit of 15 major listed automakers was just 21.048 billion yuan—less than half of CATL's take alone. The auto industry's profit margin has slumped to just 3.6% in the first seven months, while battery players still hold double-digit gross margins. Money is flowing upstream, turning carmakers into suppliers for their own battery providers.

September brought a flurry of action from automakers. Li Auto invested 2.65 billion yuan in Sunwoda Power on September 4th, securing an 11.17% stake to become its second-largest shareholder. The new Li L8 uses Sunwoda cells across the board, completely dropping CATL. Li Auto has also announced that its self-developed batteries will be adopted across all future models. Xiaomi has been even more direct. At the launch of its Longjia battery, it added CALB and Sunwoda to its supplier list, and its new Pengcheng N70 and N90 models have ditched the CATL batteries used in the SU7 and YU7 entirely.

Meanwhile, Seres has brought in CALB and Gotion High-tech as secondary suppliers, Leapmotor is building a battery base with CALB in Jinhua, NIO has established a battery R&D base in Shanghai, and XPeng has put its chips on CALB and EVE Energy. Geely already has an internal battery capacity of 70-80 GWh, targeting 200 GWh by 2027 and 300 GWh by 2028. From rhetoric to orders, capacity, and capital, carmakers are now backing CATL's rivals with real money.

But this isn't just about cost—it's about control. Batteries account for 30-40% or even half of a vehicle's total cost, and everything from range to fast-charging, safety, energy consumption, and chassis layout is tied to the battery. Yet CATL has often delivered what amounts to a black box—discharge curves, charging strategies, and thermal management settings all tightly held in its hands. The more cars sold, the more it feels like carmakers are raising someone else's customer base.

Li Auto's model points a new direction: product definition, cell chemistry, and BMS software in-house, with Sunwoda just handling manufacturing. The supplier shifts from leading the solution to becoming a manufacturing partner.

New Tax and Solid-State Batteries Add Pressure

Since September 1st, a 2% consumption tax has been imposed on liquid lithium-ion batteries, set to rise to 4% by September 2027. In contrast, sodium-ion, solid-state, and fuel cells remain tax-exempt until the end of 2028. The tax alone has limited direct impact on CATL. Research estimates show that among roughly 20 listed battery companies, only CATL and EVE Energy could absorb the tax without passing it on—CATL's strong pricing power lets it shift costs to customers, and its higher export share cushions the blow.

The policy signal, however, matters more than the tax rate. The 27-month tax-free window for solid-state tech gives the industry a clear timeline—new technology roads have policy tailwinds while legacy routes face rising costs. CEO Robin Zeng has publicly said that mass adoption of all-solid-state batteries before 2030 is unlikely. He's speaking the truth. But capital markets don't trade the truth of today—they trade expectations. The policy news sent solid-state concept stocks rallying, while CATL, the biggest beneficiary of the liquid battery era, took the hit.

Share Buyback: All Bark, Little Bite

In July, CATL unveiled an A-share record buyback plan—no less than 20 billion yuan and no more than 40 billion yuan, with a price cap of 573 yuan, all for cancellation. The announcement drew applause. A cap 50% above the then-share price was read as strong management confidence. But little happened afterward. Only on September 11th did CATL make its first purchase—just 604,300 shares worth about 200 million yuan. Against a 40 billion yuan plan, it's a token gesture.

The plan was announced in July when shares were above 400. When the company finally acted in September, the stock had fallen to around 330. The actual buyback price of 330-331 yuan was just 57% of the stated cap. The confidence was declared, but the timing and scale fell far short of market expectations for support.

Has CATL's Moat Really Cracked?

Objectively, no. According to SNE Research, CATL's global power battery installation share approached 40% in the first half of 2026, and its domestic share rebounded to 47.72%—the first increase in three years. In passenger vehicles, its installation share hit 46.7%, up 5.6 percentage points year-on-year. In global energy storage, it holds over 35% market share, and in the US storage market, nearly 60%—Tesla uses CATL cells exclusively for storage, with Sungrow and Fluence also relying on CATL as primary supplier.

What CATL has lost is partial order volumes from Li Auto and Xiaomi. Estimates suggest these two account for around 13.6% of CATL's domestic installations. That's 13.6% of orders flowing out, while 86.4% of the base remains. What's lost is supply rights for new models; existing model relationships haven't been entirely severed.

But the real damage from this de-CATL movement isn't to current profits—it's to the valuation logic. The market's past premium for CATL was built on an assumption of irreplaceability. Carmakers had no choice but to accept its pricing, its solutions, and its black box. That allowed high margin maintenance, pricing power, and sustained profit growth. That assumption is now being shaken. Carmakers are proving with real capital that they can turn to Sunwoda, CALB, or define batteries themselves. CATL's products remain excellent, but it is no longer the only option. The premium for uniqueness is fading.

What Is a Company Earning 2.4 Billion a Day Worth?

At current A-share market value of about 1.4 trillion yuan and first-half net profit of 43.284 billion yuan (annualized at around 86.5 billion), the forward P/E sits at about 16 times. Sixteen times earnings for a global battery leader with nearly 40% market share and daily profits of 2.4 billion yuan.

On the day of the sharp decline, CLSA issued a research note arguing that the stock price already reflects pessimistic expectations, Q3 gross margins should improve, intensifying competition is industry normalcy, and there's no sign of CATL losing market share to rivals. CLSA set a H-share target price of HK$770, implying roughly 50% upside from then-current levels.

Institutions say the bad news is priced in; the market keeps selling. The debate isn't over whether CATL is a good company—it clearly is. The question is whether 16 times earnings is cheap enough. If the de-CATL movement is just beginning, 16 times might not be the floor.

Taking Stock by the Numbers

Financial health: four stars—372 billion yuan in cash and solid daily earnings, but operating cash flow growth is a modest 2.6%. Valuation: four stars—P/E of 16 is at historical lows, yet the uniqueness premium is eroding. Growth potential: three stars—energy storage is surging at 87.5% growth, but power battery expansion is slowing. Industry outlook: four stars—the global electrification trend remains intact, but the competitive landscape is shifting. Market timing: two stars—buyback execution has been weaker than expected, and main funds continue to flow out.

The overall score: 6 out of 10. That's not a rejection of CATL's assets. Global market share of 40%, doubling storage growth, and 372 billion in cash—all real. At 16 times earnings, any manufacturing leader making 80 billion a year looks inexpensive. A 6 reflects the ongoing reconstruction of CATL's valuation logic. The market once gave it an irreplaceable leader premium. Carmakers are now signaling with orders and capital that it isn't irreplaceable. Whether and how much of that premium persists is still being repriced.

The fall from 468 to 316 isn't about earnings—it's about uniqueness. Profits are still rising. The 2.4 billion-a-day business continues. Storage is still doubling. But the market is trading ahead, calculating what a less-unique CATL is worth. That answer won't come from today's financials but from the next 6 to 12 months: once Li Auto, Xiaomi, and Geely's self-developed batteries hit the road, where will CATL's installation share land, and what will its gross margins be? Until then, whether 16 times is cheap or fair remains anyone's guess.

This article does not constitute investment advice. The competitive landscape in the power battery industry is changing rapidly, and the actual progress of automaker self-developed batteries carries uncertainty. Please make independent decisions at your own risk.