CATL Conference Call: Capacity at Full Load, Price Increases Not the Core Driver, Data Centers Bring Considerable Energy Storage Demand
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Yesterday, CATL released its Q3 financial report. The company’s Q3 revenue increased by 12.9% year-on-year, and net profit rose by 41.21% to 18.5 billion yuan, with profit growth significantly exceeding revenue growth.
In the subsequent earnings call, CATL further detailed its capacity situation and future business outlook. The company’s capacity utilization rate continues to rise and is currently at full load; price increases are not the core driving force. This year, energy storage growth is good, and next year’s momentum is expected to continue, as the business model has taken shape and reached an economic inflection point, making profitability achievable.
Main points from the call:
Current capacity utilization keeps increasing, capacity is fully loaded, and the scale of capacity under construction continues to grow. With the construction of new bases like Jining, capacity will be gradually released and the supply shortage will gradually ease.The company aims for long-term win-win development with industry chain partners; price increases are not a core driver. More focus is placed on meeting customers’ diverse needs with quality products and building more competitive products for clients.Energy storage system sales account for about 20% of total shipments. The proportion of system-side and AC/DC-side products is gradually increasing, which helps net profit to some extent, but will not significantly affect overall results in the short-term. Power batteries are still the main profit driver.Energy storage growth this year is solid, and next year's momentum is expected to continue, as the business model is established and economically viable for profit. In the future, there will be more data center storage solutions, and the application of main power supplies will also increase; demand from data centers is considerable.Bulk commodity price increases can be passed on through linkage with little impact on the company. Lithium battery material expansion is cyclical. Current prices fluctuate around the value center; core is still product competitiveness. The company has complete upstream supply chain layout and can handle related impacts.Sodium batteries have begun pilot applications in commercial vehicles and are under joint development for passenger vehicles. Products will be available by year-end, with shipments and ramp-up starting next year (actual volume depends on customers’ end sales), but client authentication is required.China’s lithium battery export control policy has no impact on company battery exports; equipment export is not outright banned but regulated through approvals for orderly competition and export. Communication with government is smooth, and there’s no impact on overseas factories and LRSO cooperation layout. In Europe, the company has set up three factories in Hungary, Germany, and Spain, leading the industry in localization. Current policies have no substantial adverse impact on company development.
Transcript of the call:
Dear investors, good evening. I am Lin Meina from CATL. Welcome to the CATL 2025 Q3 earnings call, and thank you for your long-term support and attention. First, let me introduce the company executives present today: Board Secretary and Deputy General Manager Mr. Jiang Li, and CFO Mr. Zheng Shu. Today's meeting has two parts: I will give a brief report on company operations during the period, then we’ll move to the Q&A session. First, a business overview—during the reporting period, the company continuously launched innovative products, deepened customer cooperation, and achieved steady performance growth.
In Q3 2025, the company achieved a total revenue of 104.19 billion yuan, up 12.9% year-on-year. Net profit attributable to shareholders was 18.55 billion yuan, up 41.2% year-on-year. Net profit margin for the period was 19.1%, up 4.1% year-on-year. Cash reserves were ample; cash and tradable financial assets exceeded 360 billion yuan at the end of the period, strongly supporting R&D and large-scale capacity construction. In the first three quarters of 2025, the company spent 15.07 billion yuan on R&D, up 15.3% year-on-year, maintaining industry-leading investment.
Additionally, to meet surging customer orders, the company is vigorously advancing global capacity construction. Leveraging forward-looking demand estimation, large-scale expansion was launched first, with substantial expansions at domestic bases in Jining (Shandong), Zhaoqing (Guangdong), Yichun (Jiangxi), Xiamen (Fujian), Qinghai, and Ningde (Fujian). The Jining base alone is expected to add over 100GWh of new energy storage capacity by 2026. Overseas, the German plant began production in 2024 and remains profitable. The first phase of the Hungarian plant’s cell lines is being installed and debugged, with completion expected by end-2025. The Spanish plant finished preliminary approvals and formed a joint venture, soon starting construction. The Indonesian battery project is expected to start operation in the first half of 2026.
In the power sector, the company focuses on front-end technology innovation and application, having released the world’s first NP3.0 technology to ensure high-voltage power continuity under extreme thermal runaway, so power is not lost, with no visible smoke or fire, providing key safety for L3+ smart-driving. The first Shenxing Pro battery with this technology uses micro-composite cell structure to significantly improve energy density and battery pack rigidity. CATL’s sodium ion battery was also the first to pass the new national standard, paving the way for large-scale adoption. Sodium ion batteries excel in low-temperature performance, safety, and cost, reducing resource dependence and offering new energy security solutions.
In energy storage, global demand is entering a high-growth phase. On one hand, surging global wind and solar installations demand greater grid stability and regulation, driving energy storage demand. On the other hand, the rapid expansion of global AI data centers brings enormous power demand. PV-storage systems, as efficient green power solutions, are set to drive massive new demand. Current energy storage market demand is strong, the company is at full capacity and rapidly expanding, increasing output of large storage batteries such as 58GWh specs. Its DPP-grade storage products stand out for safety and longevity, offering terminal operators more competitive returns.
In ecosystem development, the company is joining hands with industry giants to deepen its layout. A strategic partnership with JD.com merges battery technologies with digital supply chains and omni-channel service, together forging a green, low-carbon, digitalized industrial development model. They have jointly created an official direct-sales channel for chocolate battery swap, promoting battery-vehicle separation and full-vehicle sales. Also, CATL and Sinopec are building a nationwide battery swap network, with both chocolate and heavy-duty truck swap stations operational, continuously enabling green mobility.
On ESG, at the Munich auto show, CATL issued an industry-wide “born for recycling” initiative at the global battery circular economy forum. The company believes true battery recycling must be considered from design, integrating recycling into the entire process and building a unified, transparent, globally participatory collaboration platform through tech and business model innovation. This is both to maximize battery lifecycle value and to lead the industry toward a truly sustainable future. On top of strong performance growth, the company achieved simultaneous progress in technology and ecology. The NP3.0 tech secures safety for smart driving; sodium cell batteries have opened the door to large-scale application. Meanwhile, CATL is accelerating a global green energy ecosystem through deep partnerships, continuously leading battery industry sustainability. With leading tech, solid market position, and deep ecosystem, CATL will continue to create long-term value for shareholders. Thank you for listening; this is the end of the business update. Next is the Q&A session; please listen for instructions.
Q&A session
Q: What was the company's shipment level in Q3? What’s the split between power/energy storage and domestic/overseas?
A: Q3 shipments were about180GWh. The ratio of power to storage is about 8:2; storage is 20%, power 80%. Domestic to overseas is about 7:3.
Q: Given industry supply and demand tightness, what’s the capacity plan for the end of this year and next? Will CAPEX be raised? Any price hikes?
A: Current capacity utilization continues to rise, full load, and capacity under construction keeps growing. As new bases like Jining come online, capacity will be gradually released and supply tightness will ease. Our aim is long-term win-win with the chain; price increases are not the core driver. More focus is on quality products and building customer competitiveness.
Q: Q3 inventory exceeded 80 billion, up about 8 billion quarter-on-quarter. Why? Was it affected by overseas storage recognition?
A: Inventory increased for two main reasons: 1) business expansion means some deliveries are in transit; 2) stockpiling for future deliveries. Despite the absolute inventory rise, inventory turnover days didn’t change—this is normal cycle stock, to be shipped within regular cycles.
Q: Profit per unit—outlook? Impact from energy storage sales?
A: Unit net profit has been stable across recent quarters, the goal is to keep it relatively stable long-term. Unit gross margins are affected by product mix changes and other factors, but quarterly swings are acceptable. Storage system sales account for about 20% of shipments; their system- and AC/DC-side product share keeps rising, helping net profit to some extent, but will not cause significant short-term swings in the overall figures. Power batteries are still the main profit driver.
Q: Regarding shipment-based invoicing metrics?
A: There’s a gap between shipments and invoiced sales, invoice volume is slightly smaller. In Q3 2025, shipments were about 180GWh; invoiced volume exceeded 165GWh, the 10+GWh gap mainly comes from storage products (cabinet-side, AC/DC-side, system-side) needing installation-acceptance before revenue can be recognized, usually within 180 days.
Q: Impact of China’s lithium battery export controls and European tech transfer demands on overseas capacity/cooperation?
A: China’s export controls have no impact on battery exports; equipment export is regulated via application and approval for orderly competition. Communication with government is smooth, and there is no impact on overseas plants or LRSO collaboration. In Europe, we've laid out three plants—Hungary, Germany, Spain—localization progress is industry-leading, and current policies have no substantial adverse impact.
Q: How will next year’s raw material price increases affect profitability, and how does the company’s supply chain plan offset this?
A: Raw-material price increases must be distinguished between supply/demand shifts and commodity or geopolitical factors. Bulk commodity prices can be passed through linkages, with little impact. If material costs rise from supply issues, our broad upstream supply-chain layout (e.g., investing in Shenghua, etc.) strengthens upstream-downstream ties and hedges some supply risk. Lithium material expansion is cyclical; prices fluctuate around the value center, but core is product competitiveness. Our upstream supply-chain is complete and can handle related risks.
Q: What’s the specific forex loss in Q3? Will mining operations cause impairments in Q3 or Q4 due to shutdowns?
A: For forex, we use hedging tools, so statement forex gains/losses are hedged with costs; overall it's effective, and specific forex loss data is not disclosed. Impairments are mainly from inventory write-downs (as our inventory is large, we make provisions based on prudence and age); mining business risks were already addressed last year, so there’s no new impairment in this quarter or upcoming quarters, and idle mine operations won't cause new impairment.
Q: What’s the share of trucks (including heavy/medium/light trucks, commercial/logistics vehicles) in power battery business this year? Prospects?
A: In power batteries, passenger vehicles are still the majority; commercial vehicles are about 20% and growing fast. This year, heavy truck market growth is over 100%, logistics vehicles nearly 60%, commercial vehicles outpacing passenger vehicles. Heavy trucks have hit an economic inflection point this year due to infrastructure improvements, so it’s a growth year: penetration rate is about 23%, likely rising to 60% or higher by 2030. Swap systems suit long-haul trucks; short trips suit charging. New models and infra plus inflection point will drive electrification of trucks and logistics vehicles.
Q: Energy storage business—growth, share rise, domestic/overseas layout, and domestic profit situation? Any major Q4 output increment? Outlook?
A: Energy storage is growing faster than power batteries, but constrained by saturated capacity this year. As capacity is released, more layout will come domestically and globally. Domestically, since document 136, peaking and arbitrage needs have increased demand. From a capacity perspective, Q4 should see significant output increase. Outlook is positive; energy storage grew well this year and should continue next year, with business model and profitability established.
Q: What’s the shipment share for new power products (Shenxing, Kirin, etc.)? When will sodium batteries have meaningful output? Any progress in solid-state batteries?
A: Shenxing, Kirin, etc. are expected to reach about 60% shipment share this year, well recognized by customers and will be mainstream. Sodium batteries are piloted in commercial vehicles, jointly developed in passenger vehicles, to be launched by year end and shipped from next year onward (volume depends on customer’s end-sales); but client verification is needed. No disclosure on solid-state battery; time will tell.
Q: General growth trend for power and storage demand next year? Industry production plan ramping up—is it accurate?
A: Both power and storage will maintain solid, high growth next year. For storage, after document 136, plus overseas data center and large storage push, demand is strong at home and abroad. Power: no worry about China EV purchase tax phase-out; many phase-outs haven’t hurt sales, and storage plus commercial vehicles’ fast growth can offset risks. Confident about demand through 2030. Production plan data should be examined with care.
Q: What’s the competitive structure in energy storage? Are product barriers in storage lower than power? With new second-tier and Korean storage production, can CATL keep high market share and unit profit?
A: Storage systems are very complex, must operate safely for 15+ years, so safety demands are very high; this is not a low-barrier field. Overseas, CATL’s safety and quality are well recognized. Korean firms are just starting in LFP, at tech follower stage, with higher costs than CATL. The business cycle in storage, like commercial vehicles, is long and robust, so safe, dependable suppliers who can deliver as promised are trusted. CATL’s high market share in commercial vehicles reflects this. In the US, challenges stem mainly from geopolitics.
Q: Next year, how will average battery size per domestic NEV trend? Trends for BEV and range-extender?
A: Average battery per vehicle will keep increasing. BEVs, due to consumer demand for more range, are steadily increasing their battery size. For range extenders, consumers prefer using electricity, so bigger batteries are more popular—this trend will continue. Both BEV and range extender battery sizes will rise.
Q: Update on Hungary plant ramp-up? How do its unit costs compare with Germany and China? How will it help European market share?
A: Hungary plant will start production at year-end; equipment is being installed and debugged, and production will begin once debugging is complete. Costs: efficiency there means costs are about 20% lower than in Germany, and the plant is already profitable. It’s expected to have good profitability going forward.
Q: For high-end and large battery new products, what customers may increase battery share? How does new battery profit margin compare with earlier ones?
A: As customer volume and profit rise, they demand better battery performance and quality. With our product advantages, we’re working with leading clients on BEV/hybrid models. Going forward, new products like the second-generation Shenxing and multinucleus batteries will be adopted in more new models, winning more share among new customers. Unit net profit will remain stable; we will not seek excessive profits from products.
Q: For high-end products with tight supply (Kirin, Xiaoao, etc.), will you tighten car-side rebates or payment policies?
A: Short-term supply or materials price pressures will not be passed on to customers; there will be no price hikes for this. In case of supply shortage, we work with partners to meet real demand, discourage hoarding, and encourage fleet circulation. Payment policies are adjusted by client shipping ratio, not by supply tightness. No planned changes to payment terms; our goal is to help clients sell more vehicles. We aim for long-term strategic partnerships and sustainability, resisting short-term profit from market swings or temporary policy adjustments.
Q: What will be the shipment share for 5/8-series 7Ah cells next year? Any regional shortages from structure change?
A: 5/8-series 7Ah cells are popular with clients thanks to interface, temperature, energy density, and safety advantages—they’re the sweet spot for now, so share will rise, just as Shenxing/Kirin share ramped quickly after recognition. Capacity bottlenecks should ease in the next one or two quarters; delivery is not an overriding concern.
Q: What are common storage formats for data centers? Will primary power supply be rapidly adopted next year?
A: Data center storage can be internal backup (transitioning from lead-acid to lithium, still small share), PV-storage as main power for long, steady clean energy (big capacity, as in Middle East projects), or PV plus wind plus storage, grid connection, etc. Storage schemes will diversify, main power supply usage will rise, and demand from data centers is considerable.
Q: If capacity ramps up next year, what’s the outlook for passenger car battery market share?
A: Indeed, share was slightly constrained by capacity this year, but product competitiveness is strong. If capacity is released next year, product will be even more welcomed by clients. We maintain a long-term strategic view, not worried about short-term competition.
Q: Will the US's 25% storage tariff early next year cause a pre-rush in shipments and draw from next year’s demand? Are US policy headwinds easing or tightening?
A: US policies are uncertain. Client business arrangements are long-term, but this uncertainty is affecting the US market and data center storage. We hope for less geopolitical uncertainty to win more US business, but policy trend depends on top-level negotiation.
Q: After the domestic storage capacity tariff policy, what’s the impact on orders and client partnerships?
A: After the storage capacity tariff policy, storage stations can make profits and the market is more commercialized. Both we and competitors are exploring new co-op models, but early stage, so not discussed in detail yet.
Q: What are the main application scenarios for sodium batteries in next five years? For which price points or models is it suitable in power field? How is its positioning vs lithium?
A: Sodium batteries have relatively low cost, good low-temp and fast charging, so they can be used in commercial vehicles, passenger swap models, start-stop products, and more. Early use may be in budget models or cold regions; next-gen sodium batteries will improve energy density and performance. Sodium batteries expand the boundary for EVs vs just replacing lithium; scale will depend on market recognition.
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