A research report indicates that by 2026, CATL (03750) will widely deploy sodium-ion batteries across four sectors: commercial vehicles, passenger vehicles, battery swapping, and energy storage. This initiative is expected to facilitate the adoption of new energy vehicles in cold climates and stimulate new market growth. The company is projected to maintain its position as the global leader in battery shipments for 2025. In 2026, it is actively expanding production capacity to meet robust demand. Net profit forecasts for 2025, 2026, and 2027 are 69.5 billion yuan, 90.8 billion yuan, and 112.0 billion yuan, respectively, representing year-on-year growth of +37%, +31%, and +23%. Earnings per share are estimated at 15.3 yuan, 19.9 yuan, and 24.6 yuan. The current H-share price implies forward P/E ratios of 29x, 22x, and 18x for 2025, 2026, and 2027, supporting a Buy recommendation.
Key viewpoints from the report include strong growth in battery shipments, with demand outstripping supply. The company's comprehensive supply chain layout and long-term agreements with external suppliers help mitigate the impact of raw material price fluctuations. Its competitive product portfolio allows for profit improvement through product mix optimization, supporting stable profitability. A recently announced employee stock ownership plan, involving 4,956 core staff and utilizing repurchased shares worth up to 743 million yuan, is expected to enhance team cohesion.
Sodium-ion battery mass production is imminent and is anticipated to activate new market segments. CATL plans a full-scale rollout of sodium batteries in 2026. Its new sodium battery boasts an energy density of 175 Wh/kg and a cycle life exceeding 10,000 charges. The batteries exhibit superior low-temperature performance, operating stably at -50°C and retaining over 90% capacity at -40°C. At -30°C, they support instant charging, with discharge power nearly triple that of lithium-ion batteries. They also offer high safety, resisting fire or explosion under severe conditions like cutting, drilling, or crushing. These properties address winter range degradation issues, potentially boosting NEV adoption in cold regions.
Several cooperative sodium battery projects are already underway, with mass production expected by mid-year. For commercial vehicles, sodium batteries will first be equipped on JAC models, with production starting in July. For passenger vehicles, the world's first sodium battery-powered model was unveiled by Changan Auto on February 5, offering a 400 km range and 5C fast charging; it is slated for a mid-year launch. Collaboration with GAC Aion is also progressing.
Lithium battery demand remains strong, prompting aggressive capacity expansion. According to SNE Research, CATL led the global market in both power and energy storage battery sales for 2025, with market shares of 39.2% and 30%, respectively. Shipment growth rates were 35.7% for power batteries and 80% for energy storage batteries. Global lithium battery demand is projected to grow over 30% year-on-year in 2026, with energy storage continuing its rapid expansion; EESA forecasts a 55% growth rate for new global energy storage capacity. Power battery demand is expected to grow around 23%.
With current operations nearing full capacity, the company is actively expanding. The value of construction in progress reached 37.366 billion yuan by the end of the third quarter, a significant 25.6% increase from the end of 2024. Recently, CATL signed an agreement with the Quanzhou government to build a new energy battery production base, with construction expected to begin in the second quarter of 2026. A comprehensive strategic cooperation agreement was also signed with the Yunnan government to establish a lithium battery base in the Central Yunnan New Area, targeting a first-quarter start. Additional capacity is set to be released this year from bases in Shandong, Henan, and Sichuan.
