On September 7, Li Auto officially announced an important decision:
Due to the orders for the new-generation Li Auto MEGA exceeding expectations, the reserve of 5C ternary lithium batteries provided by CATL (Contemporary Amperex Technology Co., Limited) is about to be depleted. Subsequent users who lock in their orders will be switched to Li Auto's self-developed 5C ternary lithium batteries.
The upcoming new model, Li Auto i9, will also fully switch to Li Auto's self-developed batteries after the delivery of the first batch of products.
Ultimately, including models such as the Li Auto L8, L6, and i8, which were previously equipped with Li Auto's self-developed batteries, Li Auto's self-developed batteries will cover all models in the future.
Those with a certain understanding of the power battery industry should know that "self-developed" and "self-manufactured" cannot be completely equated.
At this stage, for Li Auto's "self-developed" batteries, the battery cells will be provided by Sunwoda.
As early as October last year, Li Auto and Sunwoda jointly established Shandong Li Auto Battery Co., Ltd., with both parties holding a 50:50 equity ratio.
On September 4 this year, Sunwoda announced that Li Auto plans to invest CNY 2.65 billion to subscribe for an 8.79% stake in Sunwoda Power, becoming the second-largest shareholder of Sunwoda.
Undoubtedly, this represents a further escalation of the cooperation between Li Auto and Sunwoda.
Coincidentally, many brands that were originally "solely supplied" by CATL are now unanimously seeking second-tier battery brands as suppliers.
For example, Xiaomi held a battery launch event in Beijing, officially announcing that two battery suppliers, Sunwoda and CALB (China Aviation Lithium Battery), will serve as important strategic partners for Xiaomi's self-developed "Dragon Armor Battery".
In mid-year this year, Tesla also added Sunwoda to its supply chain list, and AITO introduced Gotion High-Tech...
It should be noted that in September last year, Sunwoda was still being sued over battery cell quality issues, ultimately reaching a settlement agreement with a compensation of CNY 600 million. Earlier this year, the swelling issue of CALB's 177Ah batteries also caused a huge uproar.
Today, the new national standard for power batteries, which has stricter safety requirements to eliminate thermal runaway fires and explosions, has arrived. Consumers are paying more and more attention to battery brands, with some even refusing to buy unless the battery is from "CATL" or "BYD".
Yet against this backdrop, automakers are beginning to side with second-tier battery manufacturers. Why is this happening?
Today, let's have a good talk about it!
01. Cost Reduction: An Urgent Necessity
Those familiar with the NEV (New Energy Vehicle) industry in recent years should have heard the saying that "automakers are working for battery manufacturers."
Although automakers have been complaining almost every year, the situation has never been alleviated.
According to data from the National Bureau of Statistics, the revenue profit margin of the complete vehicle manufacturing sector in the first half of this year has dropped to only 1.5%, hitting a 10-year low and far below the national industrial average of 3%.
Statistics show that among 23 automakers listed on the A-share and Hong Kong stock markets, only 6 achieved net growth in the first half of this year. Many automakers showed increased profits but decreased revenues, or even turned from profit to loss. After amortizing R&D, sales, and operations... the per-vehicle profit of some automakers has dropped to less than CNY 600, leaving virtually no profit.
According to financial report data, in the first half of 2026, CATL's net profit margin was 15.6%, and its net profit attributable to shareholders was CNY 43.284 billion.
Driven by survival pressure, automakers have to resort to cost reduction and efficiency enhancement measures, turning their attention to second-tier battery manufacturers.
According to industry insiders, the supply quotes for power batteries of the same specifications from second-tier battery manufacturers to automakers are about 10% lower than those from CATL.
Do not underestimate this 10%. For an automaker with an annual sales volume of over 100,000 units, theoretically, the battery procurement cost could be reduced by at least several billion CNY, and potentially over ten billion CNY in a year.
This has also become the fundamental reason why automakers have frequently started looking for "second suppliers" in the power battery field in recent years.
02. Second-Tier Battery Manufacturers Going All Out
Besides cost savings, there is another reason why automakers are starting to choose second-tier battery manufacturers: the independent right to define products.
Although CATL can provide almost the most comprehensive power battery pack or cell solutions in the industry, automakers are restricted to a certain extent by battery solutions when defining products, and cannot fully grasp the initiative in their own hands.
Therefore, subjectively, there is hardly any automaker that does not yearn to develop its own batteries to create differentiated advantages.
However, building a battery production line from scratch is extremely difficult. First, they face high-priced equipment investments. Second, improving the battery yield rate requires a lot of time and experience accumulation. Third, there are existing patents and technical barriers in the industry that need to be circumvented and overcome.
This is why, up to now, the number of domestic automakers with independent battery cell production capabilities can be counted on one's fingers (BYD, Great Wall's SVOLT, Geely's ENERGEE, GAC's Inpow Battery Technology).
So, is there a shortcut to only developing batteries without manufacturing them?
Yes, there is.
Just as some cross-over brands find automakers for "OEM manufacturing," or mobile phone manufacturers develop their own chips and then find chip manufacturers for OEM, automakers can also take their self-designed batteries and find battery manufacturers for OEM.
At this point, the opportunity for second-tier battery manufacturers arrives!
Compared to power battery leaders like CATL, the profit margins of second-tier battery manufacturers are far from comfortable, and the fierce competition is even comparable to that of automakers.
In the first quarter of this year, CALB, which performed relatively well, had a net profit margin of 3.16%, while the net profit margins of Sunwoda and Gotion High-Tech were less than 1%.
Therefore, second-tier battery manufacturers are extremely eager for deep binding and stable supply nominations from automakers. This offers a better opportunity to improve profitability than simply selling standard solutions and competing on price.
In order to connect with automakers as much as possible, second-tier battery manufacturers are even willing to "give up their soul."
They are not only willing to share core technical details such as raw material ratios and production processes, which serve as the company's "underlying code," with automakers, and willing to arrange professional technical personnel to be stationed within the automakers, but they even allow automakers to produce battery cells or battery packs with unique formulas entirely according to their own needs and wishes.
Of course, CATL also supports OEM, and its ability to expand capacity is universally recognized to be strong. However, first, pricing requires communication and coordination; second, automakers need to sign larger capacity demand orders as a guarantee.
But at this point, a new problem arises.
For automakers, an unavoidable problem when choosing second-tier battery manufacturers is: how can battery quality be guaranteed?
After all, in terms of product performance and consistency, second-tier battery manufacturers indeed have a gap with CATL in the short term.
This is why Li Auto chose to directly invest a huge amount of capital to acquire a stake in Sunwoda, becoming Sunwoda's second-largest external shareholder, and why some automakers choose to establish joint venture battery factories with second-tier battery manufacturers.
Besides facilitating rapid production, this also allows them to introduce their own quality management systems to ensure that the actual production battery quality conforms to their own standards as much as possible.
Even if quality issues really arise later, automakers have the obligation to take responsibility personally, rather than falling into a cycle of wrangling with battery suppliers, thus providing users with a bottom-line explanation.
03. Will CATL Be Dethroned?
So the question arises: can CATL still maintain its dominant position in power batteries?
The editor-in-chief's view is that, at least in the short term, CATL's position remains unshakeable.
There are several reasons:
First, in the entire industry chain system, CATL still significantly leads second-tier battery manufacturers.
This is not only about the product consistency and stability brought by strong engineering capabilities, but also includes all aspects such as capacity, R&D, supply chain, delivery, and service.
In the field of power batteries for high-end models, CATL remains the best choice.
Even for mid-to-low-end models, having CATL as the "sole supplier" for the entire model lineup is still a good selling point.
In addition, for Chinese automotive brands hoping to expand their ambitions overseas, CATL is even more unavoidable. Many foreign automakers currently only recognize CATL.
The reason is not only CATL's reputation for consecutively ranking first globally in power battery installations, but also its active overseas factory construction and layout, which can adapt to more overseas quality standards.
Involving overseas production orders for complete vehicles, as well as subsequent power battery operation and maintenance, CATL can directly radiate to the local area from its overseas factories, significantly reducing the time cost of ten days to half a month for power batteries to cross the ocean and customs.
From the perspective of the aftermarket, CATL has also been increasing its efforts to lay out operation and maintenance outlets in recent years. As of mid-2026, it has laid out nearly 1,400 "CATL Home Service Professional Service Stations" globally.
Once users equipped with CATL batteries encounter battery quality issues, they can directly bypass the automaker's outlets and use CATL's maintenance services.
On the other hand, the large-scale deployment of "Chocolate" battery swap stations in recent years also indicates that CATL is expanding its business model from "selling batteries" to a "battery full-lifecycle service provider."
In short, CATL has taken the lead in stepping into a completely new dimension, while second-tier battery manufacturers still need a lot of time to accumulate and reach this height.
04. Final Thoughts
Although CATL's position remains unshakeable in the short term, a new round of competition among battery manufacturers has officially begun.
As more and more automakers begin to cooperate with second-tier battery manufacturers, adhering to the principle of not putting all eggs in one basket, the anti-interference capability of automakers' supply chains will also be further enhanced.
At the same time, what automakers' self-developed batteries bring is not only higher technical freedom but also more bargaining chips when negotiating with the battery industry chain.
The issue of profit distribution between battery manufacturers and automakers will gradually find a new balance through this tug-of-war.
More industry competition will accelerate the implementation of new battery technologies, allowing the automotive industry to break free from the mere price war and move towards a positive cycle of competing on technology and quality. Meanwhile, battery manufacturers will form a new pattern of "leaders leading, second-tier following," each playing its own role in the industry chain.