"Cash-generating power" is astonishing! In 2025, CATL earned 72.2 billion yuan.

How can AI and energy storage businesses become the second growth engine?

Produced by | Company Research Office

Written by | Zhan Bo

As China’s new energy vehicle market penetration surpasses the critical 50% threshold, industry narratives have shifted from a “gold rush” frenzy to a brutal “elimination race” reshuffle.

In this wave, the profit focus of the industry chain is continuously shifting toward the leading companies that sell the tools—“selling shovels.” As the top “shovel king” in this trillion-yuan track, CATL (300750.SZ) recently released its 2025 performance report, which not only shocked the market with its strong profit ability of “earning two billion yuan a day” but also revealed its unshakable “Ning Wang” position in the industry chain with nearly 50 billion yuan in contract liabilities.

Along with the annual report, “Ning Wang” also announced its profit distribution plan for 2025, proposing to distribute cash dividends of 69.57 yuan (tax included) for every 10 shares based on 4,531,886,650 shares, totaling approximately 31.53 billion yuan. Over the past three years, CATL has paid nearly 100 billion yuan in dividends. As of the close on March 16, CATL’s stock price was 408.4 yuan per share, with a dynamic PE of 25.8 times and a total market value of 1.89 trillion yuan.

CATL’s stock price trend since listing, image source: Wind

A “cash cow” earning two billion yuan daily

CATL is a globally leading provider of power battery systems, mainly engaged in power batteries, energy storage batteries, battery materials, recycling, and mineral resources.

In 2025, CATL achieved operating revenue of 423.702 billion yuan, a year-on-year increase of 17.04%; among which, domestic revenue was 294.061 billion yuan (69.40%), and overseas revenue was 129.641 billion yuan (30.60%). Net profit attributable to the parent was 72.201 billion yuan, up 42.28% year-on-year, equivalent to nearly 2 billion yuan earned daily. Operating cash flow net was 133.2 billion yuan, up 37.4%.

Overall, CATL’s revenue and net profit have returned to growth, especially in the fourth quarter, with both volume and price rising. In 2025, CATL’s overall gross profit margin was 26.27%, an increase of 1.83 percentage points from the previous year; net profit margin was 18.12%, up 3.2 percentage points.

Notably, CATL’s overseas gross profit margin exceeds domestic by 7.44 percentage points, with domestic at 24% and overseas at 31.44%.

By the end of 2025, CATL’s cash on hand was 333.513 billion yuan, trading financial assets were 58.994 billion yuan, derivative financial assets were 1.134 billion yuan, totaling 393.641 billion yuan, accounting for 40.38% of total assets, indicating a very solid financial cushion. The asset-liability ratio decreased from 65.24% in 2024 to 61.94%.

Of course, the most industry-defining indicator of CATL’s position is contract liabilities. By the end of 2025, CATL’s contract liabilities (prepaid customer payments) reached 49.2 billion yuan, a 76.88% increase year-on-year, hitting a five-year high. This indicates that many automakers and energy storage integrators are paying in advance to lock in high-quality capacity for 2026, “fighting” for orders.

Meanwhile, accounts payable reached 160.329 billion yuan, far exceeding prepayments, and this “receiving money first, paying later” financial model has allowed CATL to dominate the industry chain.

It is worth noting that in 2025, a year generally worried about overcapacity in the industry, CATL’s capacity utilization rate hit 96.9%, with a production volume of 748 GWh. This strongly refutes the “overcapacity” argument, indicating that demand exists in the industry, but there is a lack of high-quality capacity capable of stable production of high-grade cells.

Regarding R&D investment, from 2023 to 2025, CATL’s R&D expenditures were 18.356 billion yuan, 18.607 billion yuan, and 22.147 billion yuan, respectively, accounting for 4.58%, 5.14%, and 5.23% of revenue. By 2025, the company employed 22,901 R&D personnel, a 12.56% increase year-on-year.

According to SNE Research data, in the power battery field, CATL’s global market share in 2025 was 39.2%, up 1.2 percentage points from the previous year, ranking first globally for nine consecutive years (2017-2025). In energy storage, CATL has ranked first in global shipments of energy storage batteries for five consecutive years (2021-2025).

“Ballast” and “Vanguard”

In specific business segments, CATL still presents a “dual-core” drive pattern.

Power batteries remain the “ballast” of revenue. In 2025, this segment achieved revenue of 316.506 billion yuan (gross margin 23.84%), a 25.08% increase year-on-year, accounting for 74.7% of total revenue. In terms of sales volume, power battery system sales reached 541 GWh, up 41.85%. In high-end vehicle segments, “Ning Wang” almost became standard—over 60% of the top luxury electric vehicle models listed by Forbes China feature CATL batteries.

In terms of products, in 2025, CATL added “super hybrid batteries” based on lithium iron phosphate, ternary, sodium-ion, and solid-state technologies. The core of “super hybrid batteries” is the fusion of ternary and lithium iron phosphate materials, which reduces costs and increases energy density, filling the 480–500 Wh/L gap precisely. CATL announced that mass production of super hybrid batteries will begin in April 2026.

Additionally, in application scenarios, CATL has promoted power batteries in “ships, aircraft,” etc. In aerospace and low-altitude fields, it obtained AS9100D aerospace quality system certification; its subsidiary Fengfei Hang has completed multiple complex environment flight tests of 2-ton eVTOLs, and the world’s largest 5-ton eVOTL has completed its first public flight. In ships, the company has supported the safe operation of over 900 electric vessels and launched the world’s first “ship–shore–cloud” zero-carbon shipping integrated solution.

If power batteries are CATL’s core business, then energy storage is the “vanguard” of the second growth curve.

In 2025, energy storage batteries achieved revenue of 62.44 billion yuan (gross margin 26.71%), an 8.99% increase year-on-year. Sales volume was 121 GWh, up 29.13%.

Notably, the global delivery of energy storage system integration projects exceeded 70, with shipment scale increasing over 160%. In response to the rising power demand from AI data centers (AIDC), CATL has partnered with multiple tech companies to launch new energy solutions, aiming to carve out a share in the role of “selling shovels” in AI.

In products, in 2025, domestically, CATL’s Tianheng 6.25 MWh containerized liquid-cooled battery modules were mass delivered and grid-connected, with a 30% increase in energy density per unit area and 20% reduction in land use compared to previous systems; overseas, CATL launched the world’s first mass-producible 9 MWh ultra-large capacity energy storage system TENER Stack, significantly improving volume utilization and energy density.

Furthermore, CATL’s battery swapping business also made significant progress. By the end of 2025, the company’s “ChocoSwap” stations exceeded 1,000, distributed across 45 cities nationwide, covering the Yangtze River Delta, Beijing-Tianjin-Hebei, Sichuan-Chongqing, and Greater Bay Area, with profitability first achieved in Chongqing.

CATL valuation and future outlook

Looking back at recent years, from 2021 to 2023, benefiting from explosive growth in new energy vehicles, CATL’s revenue soared from 130.356 billion yuan to 400.917 billion yuan, and net profit attributable to the parent increased from 15.931 billion yuan to 44.121 billion yuan, with a compound annual growth rate exceeding 50%.

In 2024, due to lithium carbonate price adjustments, revenue declined 9.70% to 362.013 billion yuan; net profit was 50.745 billion yuan, up 15.01%, affected by industry competition and base effects, with growth slowing by 24.26 percentage points from the previous year.

In 2025, CATL returned to the growth track, achieving revenue of 423.702 billion yuan, up 17.04%; net profit attributable to the parent was 72.201 billion yuan, up 42.28% (cost reduction, efficiency improvement, and structural optimization). However, the 17% revenue growth rate has significantly slowed compared to previous years—an inevitable result as the industry transitions from rapid growth to maturity.

According to the China Association of Automobile Manufacturers, in 2025, China’s new energy vehicle sales reached 13.875 million units, with new energy passenger cars at 13.005 million units, up 17.7%, with penetration rising to 54.0%; new energy commercial vehicles reached 871,000 units, up 63.7%, with penetration at 26.9%. Overseas, according to the European Automobile Manufacturers Association, in 2025, European new energy passenger car sales were 3.858 million units, up 30.9%, with a penetration rate of 29.1%.

Based on industry experience, after penetration exceeds 50%, industry growth tends to slow down. Data from the China Association of Automobile Manufacturers shows that in 2024, China’s new energy passenger vehicle growth was 40.2%, dropping to 17.7% in 2025. As the industry leader, CATL’s overall incremental growth broadens the market space, making the growth rate of power batteries higher than that of the entire new energy vehicle industry.

It is also worth noting that the growth rate of new energy commercial vehicles is relatively fast. Data shows that in 2024, sales increased by only 28.9%, but in 2025, they surged by 63.7% (stimulated by policies—such as replacing old trucks with Euro 4 and below, lower total cost of ownership than fuel vehicles, and breakthroughs in technology and charging—like battery swapping). The penetration rate is currently just over 20%, and the growth is expected to remain high.

Additionally, overseas markets have also exceeded 20% penetration, with relatively steady growth. Due to unstable subsidies abroad (Europe restarting subsidies, the US halting subsidies) and lagging infrastructure, overseas growth shows a “stepwise” pattern, unlikely to match the domestic exponential growth.

From the supply side, the power battery market currently exhibits an “oligopoly” pattern dominated by CATL, BYD as the second player, accounting for over 55% of the global share. Other players like Guoxuan, EVE Energy, and CALB are chasing behind. South Korea’s LG and Japan’s Panasonic are shrinking their market shares. The industry overall does not lack capacity but lacks high-quality capacity, with automakers demanding “good use” rather than just “usable” cells (e.g., fast charging, high safety).

In the energy storage industry, driven by global power demand growth and low-carbon transition in recent years, the market demand has surged. According to SNE Research, from 2023 to 2025, global energy storage battery shipments were 185 GWh, 301 GWh, and 550 GWh, respectively, with year-on-year growth of 53%, 62.7%, and 79%. Data from Zhongguancun Energy Storage Industry Technology Alliance shows that in 2024 and 2025, China’s new energy storage installed capacity reached 109.8 GWh and 189.5 GWh, respectively, with year-on-year increases of 136% and 73%.

These figures indicate that global energy storage battery shipments are continuously growing at a high rate, and domestic storage installations, while slightly declining in 2025, generally keep pace with global trends.

Currently, the energy storage market divides into two camps: vertical integration and specialized system integration (these are also converging). In the vertical integration camp, CATL leads, followed by EVE Energy, Hecen Storage, and Envision. In the system integration camp, Sungrow is a leader, along with Huawei Digital Energy and Tesla. Based on the latest scale, CATL ranks first, followed by EVE Energy and Hecen Storage. Others include Sungrow, CALB, Guoxuan, and BYD. Notably, Hecen Storage (whose core founders come from CATL) has rapidly increased its share due to extreme focus (only doing energy storage) and aggressive globalization (first factory in the US).

With the increase in wind and solar installations and the growth of AI data center demands, long-duration energy storage needs are exploding, especially for large cells of 500Ah+—a strong demand for 500Ah+ cells. Currently, only CATL, EVE Energy, Hecen Storage, and Envision can produce such large cells.

Overall, CATL’s future incremental growth will focus not only on the core passenger vehicle market but also on commercial vehicle shipments, overseas market growth, and energy storage expansion. Currently, CATL’s static PE is around 20x, and dynamic PE about 25.8x. A conservative estimate for 2026 net profit growth is around 20%. The current stock price of 408.4 yuan per share is within a reasonable range.

At the earnings conference, CATL’s management clearly outlined expectations for 2026, believing that achieving a 25%-30% compound annual growth rate from 2026 to 2030 is feasible. They have also established relatively stable pricing mechanisms with major clients, confident in reducing future quarterly performance fluctuations.

Additionally, over the past three years, CATL has continuously paid out 50% of net profit attributable to the parent as dividends, totaling nearly 100 billion yuan, providing a stability cushion for valuation. It is expected to maintain high dividend payouts in the future.

After the annual report release, many brokerages issued buy ratings for CATL, including GF Securities, CITIC Securities, Huatai Securities, and Guosen Securities. Their forecasted minimum target price for 2026 is 401.65 yuan, with a maximum target of 618 yuan.