Lithium carbonate prices have surged from below 60,000 yuan per ton a year ago to over 150,000 yuan, more than doubling. The entire industry chain has been focused on one question: whether the battery leader’s profits can withstand the pressure.
The first-quarter report released by Contemporary Amperex Technology Co.,Ltd. (CATL) on the evening of April 15 not only withstood the pressure but also exceeded market expectations.
The capital market’s reaction was direct. The day after the earnings release, CATL’s A-share price surged over 6% at one point, reaching 460 yuan per share, a record high, with its total market capitalization exceeding 2 trillion yuan. Since the low point in January 2024, the stock price has more than doubled.
Revenue grew 52% year-over-year during the traditional off-peak season. It has been learned that CATL’s total shipments of power and energy storage batteries exceeded 200 GWh in the first quarter, with capacity utilization expected to remain high in the second quarter. Despite the doubling of raw material costs, profit per watt remained stable.
Looking ahead, CATL is internally optimistic about the industry’s performance in the coming years, projecting that the global market for power and energy storage batteries could reach 4 TWh by 2030, maintaining rapid growth momentum.
An Accelerated Off-Peak Season
First-quarter revenue reached 129.1 billion yuan, up 52% year-over-year, while net profit attributable to shareholders was 20.7 billion yuan, a 49% increase. CATL delivered a strong performance during the traditionally slow first quarter.
The most direct variable was the rebound in market share. Data from the China Automotive Battery Innovation Alliance shows that CATL’s share of domestic power battery production rose to 47.72% in the first quarter of 2026, up 3.38 percentage points year-over-year, marking the first share increase in three years.
Last year, CATL’s capacity utilization was near full, leading to order spillover. This year, as capacity gradually expands, orders are returning. CATL noted that overall production scheduling remained very tight in the first quarter.
However, the share recovery represents a correction in existing volumes. The 52% growth rate has other sources.
In the first quarter, the average battery capacity per vehicle increased by 10% to 15% year-over-year. Extended-range models are using larger battery packs, pure electric vehicles are competing on range, and hybrid models are also increasing battery capacity. While passenger vehicle sales growth is slowing, the product of “sales multiplied by battery capacity” is still accelerating. This means that even as the penetration rate story enters a plateau, battery manufacturers’ shipment curves will not flatten accordingly.
The surge in commercial vehicles is another factor. Commercial and specialized vehicles now account for about one-third of power battery shipments, up from less than a quarter a year ago. Electric heavy-duty truck sales doubled year-over-year last year.
This makes commercial vehicles a key focus this year. As production tools, once they pass the cost inflection point, expansion can occur very rapidly.
Energy storage has always been CATL’s second growth curve, but the notable jump in its proportion this quarter is significant. Energy storage accounted for 25% of shipments, approximately 50 GWh, compared to around 20% in the same period last year. The catalyst is the implementation of capacity pricing policies, which have transformed energy storage from a speculative tool relying on peak-valley price differences into infrastructure with guaranteed cash flow. The attitudes of project developers and financiers have fundamentally changed.
Share recovery, increased battery capacity per vehicle, commercial vehicle growth, and energy storage acceleration—each of these factors alone is not surprising, but their simultaneous occurrence in one quarter created a叠加 effect that pushed growth to 52%.
Stress Test in a Rising Cost Cycle
Whether costs can be passed through was the key question for this quarterly report. The doubling of lithium carbonate prices was just one factor; copper, aluminum, and other commodities also rose during the same period, driving up raw material costs across the board. CATL’s metal-linked pricing mechanism with downstream customers was put to the test for the first time in a significant cost increase cycle.
The result was a gross margin of approximately 24.8%, slightly higher than the previous year.
CATL stated that it did not proactively raise prices in the first quarter. Price adjustments came from metal-linked clauses embedded in contracts—when lithium carbonate prices rose, battery prices adjusted automatically. This mechanism went unnoticed when lithium carbonate prices were at bottom levels, but now, with raw material costs doubling, the pass-through mechanism has proven effective.
Profit per watt remained relatively stable. Rising raw material costs increased the total price of batteries. With absolute profit per watt unchanged, the denominator for gross margin calculation expanded, naturally compressing the ratio. Additionally, the increased proportion of energy storage shipments, which have lower gross margins than power batteries in the domestic market, further weighed on the overall margin.
Compared to the full-year 2025 gross margin of 26.5%, the first-quarter figure of 24.8%确实 declined. However, it showed slight improvement over the 24.4% recorded in the first quarter of last year. CATL expects its full-year gross margin to remain “relatively stable.”
Another significant variable on the income statement was foreign exchange.
It was previously noted that CATL held 330 billion yuan in cash throughout 2025, exhibiting “financial attributes,” with financial expenses totaling -7.9 billion yuan for the year, earning interest and exchange gains passively. However, in the first quarter, financial expenses shifted from -2.29 billion yuan in the same period last year to +0.06 billion yuan, a swing of 2.35 billion yuan. This was due to the strengthening Renminbi, which caused exchange losses on the foreign currency exposure within its 350 billion yuan in monetary funds.
This 2.35 billion yuan swing largely explains why the net profit growth rate (49%) was slightly lower than the revenue growth rate (52%). Profitability at the operational level did not deteriorate; rather, the financial tailwind turned into a headwind.
Signals of Stepping on the Accelerator
On the first-quarter balance sheet, construction in progress increased from 29.7 billion yuan at the start of the year to 34.9 billion yuan, a rise of 5.2 billion yuan in one quarter. Bonds payable surged from 3.4 billion yuan to 11.3 billion yuan, as CATL issued 8 billion yuan in bonds during Q1. The Hungary factory has completed equipment commissioning and is about to begin production. The energy storage base in Jining, Shandong, with over 100 GWh capacity, is advancing.
CATL exercised restraint in capacity expansion during 2023-2024, repeatedly emphasizing “caution” in investor communications.
That term has now disappeared.
CATL’s Board Secretary Jiang Li stated that the company began gradually expanding production in the second half of 2024, being among the first in the industry to see signs of market recovery. Passenger vehicle penetration has surpassed 50%, significantly increasing certainty. Commercial vehicles have passed the cost inflection point, with substantial volume in heavy-duty logistics vehicles. Domestic energy storage has been activated by capacity pricing policies, becoming a genuinely profitable tool. Energy storage demand for AI data centers is highly certain, with a single data center potentially requiring 15–20 GWh of supporting storage.
Management revealed that the global market for power and energy storage batteries could reach 4 TWh by 2030, with a compound annual growth rate exceeding 25%–30% in the coming years.
4 TWh. Global power battery usage in 2025 was approximately 1,187 GWh. This implies a more than doubling in five years.
This figure explains all of CATL’s current actions: issuing bonds to储备 funds, expanding wealth management quotas to hedge against declining deposit returns, accelerating industry chain investments, and orderly advancing the second phase in Hungary. A company with annual profits exceeding 70 billion yuan is not merely enjoying current harvests but is building infrastructure for a market several times larger.
CATL is not the only one sensing the opportunity. BYD launched super-fast charging batteries this year, Eve Energy and HiTHIUM are aggressively expanding energy storage capacity, while LG and Samsung SDI are racing to build capacity in North America. Jiang Li also noted that after BYD followed the super-fast charging route, many automakers have approached CATL for more cooperation. Competitors have helped educate the market.
This round of lithium battery expansion cycle is fundamentally different from the 2021–2022 cycle. The previous cycle had a single driver—passenger vehicle penetration surging from 15% to 30%—with everyone betting on the same trend and retreating together when the tide turned. This round’s drivers are diversified: penetration rates, battery capacity per vehicle, commercial vehicles, energy storage, and data centers—five trends converging in the same window. Diversification means the cycle is less vulnerable to a single variable, but it also means the true slope of each trend remains to be verified.
CATL’s assessment is that the new cycle has already begun, and waiting is no longer an option. Next week, CATL will also release new technologies, products, and ecosystems to seek further breakthroughs in market share.
Establishing Times Resources Group with a planned registered capital of 30 billion yuan, integrating years of investments in key minerals like lithium, nickel, and phosphorus into a specialized operating platform, and appointing Chen Jinghe, founder of Zijin Mining, as a company advisor—all these moves are aimed at preparing for the new lithium battery boom cycle while further securing the foundation of the industry chain.
For the lithium battery industry, when the world’s largest shipment volume company ends its restraint and makes large-scale capacity bets again, other players face a question: follow or not follow. Those who followed incorrectly in the last cycle are still digesting excess capacity.
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