Giants losing share as battery market grows

Power battery giants CATL and BYD have seen their market shares decline even as the market maintained robust growth momentum driven by the booming new energy vehicle industry.

In 2025, the cumulative installed capacity of power batteries across the country hit 769.7 gigawatt-hours, up 40.4 percent year-on-year, according to the China Automotive Battery Innovation Alliance.

The contraction of the two leaders' market shares came amid expansion moves by second and third-tier battery providers. Data show that CATL installed 333.57 GWh for a 43.42 percent share, down 1.67 percentage points from 2024, while BYD reached 165.77 GWh, capturing a 21.58 percent share, a dip of 3.17 percentage points year-on-year.

Meanwhile, the performance of second-tier players varied, but showed an overall upward trend. CALB's installed capacity reached 53.61 GWh, a slight increase of 0.3 percent, maintaining its position as the third-largest in the industry.

Gotion High-Tech, benefiting from Volkswagen Group's cooperation, achieved an installed capacity of 43.44 GWh, with its market share increasing by 1.07 percentage points year-on-year to reach 5.65 percent.

Behind this shift lies the gradual erosion of technological barriers in the industry, said Yale Zhang, managing director of consultancy Automotive Foresight.

Lithium iron phosphate batteries have become a common choice, accounting for 81.2 percent of total installed capacity in 2025. As second-tier battery providers continue to invest in research and development in such batteries, their performance in key indicators such as energy density, cycle life and safety is approaching that of the industry leaders.

Building on this, companies like CALB and Gotion have entered the supply chains of mainstream automakers such as GAC and Leapmotor by leveraging more flexible pricing and responsive service capabilities.

To avoid over-reliance and control battery procurement costs, automakers including Nio, Li Auto and XPeng have adopted two or even three suppliers, eroding the market share of the top two battery manufacturers in favor of smaller competitors.

Notably, battery companies incubated by traditional automakers are on the rise. Geely-backed Jiyao Tongxing, leveraging its in-group supply advantages, achieved an annual installed capacity of approximately 22 GWh, with year-on-year growth of over 300 percent, becoming a top 10 player in terms of battery installed capacity.

GAC-affiliated Yinpai made its debut in the top 12 list, reflecting the strategic intent of automakers to strengthen supply chain autonomy and retain more profits within the industrial chain.

Zhang pointed out that it is difficult for latecomers to surpass the leaders by following similar technological paths, as leading companies have established dual moats in scale and technology.

He said that differentiated innovation is the key breakthrough — for example, semi-solid-state batteries jointly developed by SAIC and Qingtao Energy have been installed in MG4 hatchbacks, and such cutting-edge layouts are expected to open up new competitive avenues.

Despite facing market share dilution, leading companies remain firmly positioned. Since the second half of 2025, some 10 automakers, including Changan and Voyah, have signed long-term agreements with CATL.

Zhang said that automakers choose long-term partnerships with CATL not only for its high-quality products and technological stability but also for the competitive boost provided by its brand endorsement; this allows automakers to emphasize CATL battery adoption in their marketing initiatives.

Yang Hongxin, CEO of Svolt Energy, noted that competition in China's power and energy storage markets will remain intense through 2026, making overseas markets crucial for companies seeking growth.

Xu Yanhua, secretary-general of the China Automotive Battery Innovation Alliance, said the accelerating electrification and energy transition are fueling strong market demand.

She predicts that energy storage batteries will grow from about one-fourth to one-third or even one-half of the market, with commercial vehicle electrification expected to double in scale.