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🟠 China's battery king is losing its customers

🟠 China's battery king is losing its customers

Asiabits News

September 21, 2026

Li Auto and Xiaomi now develop their own battery cells

CATL shares closed at 304.22 yuan in Shenzhen on Wednesday, the lowest level in a year. The company had just reported its August figures: 41.45% of the Chinese market, almost twice as much as BYD in second place.

The market did not care.

The customers now build the cell themselves

Li Auto builds the new L8 with Sunwoda cells only. In early September the company put 2.65 billion yuan (around 390 million dollars) into Sunwoda's battery arm and is now its second largest owner. Its own cells will move through the whole line-up step by step, from the L6 and the i8 to the Mega.

On September 4, Xiaomi presented a battery of its own, called Dragon Armor and built with CALB and Sunwoda. In the first model, the SU7, around 90% of the cells came from CATL. In the YU7 it is half.

XPeng and Aito, the Huawei brand, now buy from several suppliers as well.

The better part of the business sits in the cell

CATL had a gross margin of 23.93% in the first half of the year. Li Auto earned 9.4% on the car itself. Buy the cell, and the better margin stays with the supplier.

Then there is the tax. Since September 1, China charges 2% consumption tax on lithium cells again, rising to 4% in September 2027. Sodium and solid-state cells stay exempt until the end of 2028. For eleven years the lithium cell was tax free.

Market share up, share price down

Figures from China's industry body for vehicle batteries put CATL at 218.2 GWh delivered into Chinese cars from January to August. That is 44.7% of the market, almost two percentage points more than a year earlier.

The share lost around 35% over the same months. In May it stood at 467.35 yuan. What the market trades is the year 2027.

In Europe CATL keeps building. Arnstadt has been making cells since 2023, and the plant in Debrecen, Hungary is designed for up to 100 GWh. Permits there are still missing, and Mercedes has the batteries for its electric VLE van shipped in from China.

FROM THE TEAM

The man who showed me around BrainCo wears one of their legs.

BrainCo came out of Harvard in 2015 and builds non-invasive brain-computer interfaces in Hangzhou. The bionic hand reads the electrical signals in the remaining arm and moves each finger on its own.

That skill now sells twice: Unitree lists BrainCo's five-finger hand as an option on the G1. Hands are the hardest part of a humanoid, and a prosthetics company got there first.

I spend most of my time looking at robots that take over work. This was the rarer visit: technology someone puts on in the morning.

We bring founders and executives into companies like this every month. If you want BrainCo on your itinerary, tell me.

OUR PARTNER

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INFOGRAPHIC OF THE WEEK

Lidar is no longer an automotive story. At RoboSense, shipments to robotics companies passed the automotive business for the first time in the first quarter of 2026.

185,500 units against 144,800, up 1,459% year on year. Customers include Unitree, AgiBot and Galbot.

Anyone building a humanoid or an autonomous forklift today buys perception from the same suppliers that scaled China's EV industry.

5 STORIES YOU MISSED LAST WEEK

🇨🇳 D-Robotics raises $400 million: The Chinese company builds chips and software for robots, the computing layer that turns camera images into movement. On Friday it closed a Series C round of $400 million. More than 8 million units of its Sunrise chip line have shipped so far, and the latest chip, the S600, is already in use at over 20 customers. Revenue in the first half came in several times higher than a year earlier. The money goes into the chip family and into a software platform that covers everything from data collection and training to deployment on the robot. China's robot builders increasingly buy their computing stack ready made.

🇰🇷 Hyundai starts building robotaxis for Waymo in October: The first Ioniq 5 units prepared for driverless operation will roll off the line at the plant in Georgia. Hyundai speaks of tens of thousands of vehicles for Google's robotaxi arm Waymo, with first deliveries planned for the fourth quarter. The cars get safety-critical systems installed twice over at the factory, plus power-operated doors. Waymo then fits its own driving technology. The partnership dates back to October 2024. The robotaxi is moving out of the custom shop and into the ordinary car plant.

🇻🇳 Vietnam moves up to emerging market status on Monday: Index provider FTSE Russell has classified the country as a frontier market so far, the smallest and riskiest category, one that many large funds are not allowed to invest in at all. On September 21 Vietnam switches into the emerging market indices, with 27 stocks added. Six of them, among them Vietcombank, Vingroup and steelmaker Hoa Phat, will also sit in the global FTSE All-World. Vietnam's weight in the emerging market index rises from around 0.33% to about 0.49%. Analysts expect $2.2 billion to $2.4 billion that index funds will have to buy as a result, spread across four stages until September 2027. The first stage brings only a tenth of that, around $220 million.

🇨🇳 EVE Energy to supply Fluence with 206 GWh of batteries: The Chinese battery maker signed a framework agreement on Friday with US storage provider Fluence, running from 2027 to 2031. Firmly committed are 16 GWh for 2027, with another 190 GWh reserved as capacity. For comparison, EVE shipped 44.46 GWh of storage batteries in the first half, 54.9% more than in the same period a year earlier. Fluence was founded by Siemens and US utility AES, is listed on the Nasdaq and had installed 19.3 GWh of storage by the end of June. Shortly before the signing, Fluence cut its revenue forecast for this year from $3 billion to $2.4 billion. How much of the reserved volume turns into actual orders will only become clear over the next five years.

🇯🇵 Japan and the US are discussing a chip plant worth up to $19 billion: Business daily Nikkei reported on Thursday that the plant would cost 2 trillion to 3 trillion yen, or $12.85 billion to $19.27 billion. It would be run by US contract manufacturer GlobalFoundries and would make logic chips, the processors that sit in cars, machinery and phones. The project falls under the $550 billion investment package Japan promised the US in the tariff dispute. Neither government has confirmed the plan so far. Japan is paying for factories in the US to protect its own exports from higher tariffs.

ALSO LAST WEEK

🇨🇳 Hello Robotaxi raises about $100 million and now carries a valuation of nearly $3 billion. Behind the company stand mobility provider Hello, Ant Group and battery maker CATL, with the round led by state-owned Shanghai Guotou. The first series vehicle, the HR1, has been in production since July, just over 100 units are built, and the fresh money goes mainly into computing power, driving models and training data.

🇸🇬 Databricks invests $350 million in Singapore The US data company is quadrupling its office space there to around 32,000 square feet and plans to grow headcount from 250 to more than 500 within three years. On top of that come training programmes for 20,000 people in the country. Customers include Standard Chartered, Singtel and Singapore Customs.

🇨🇳 The yuan is at 6.6853 to the dollar, its strongest level in four years The Hong Kong rate is at 6.6927, also the strongest since August 2022, and the currency has gained over 4% since the start of the year. The central bank raised its daily reference rate by 222 basis points in the past week alone. Chinese exporters get fewer yuan for every dollar of revenue.