CATL's Buyback Meets a Confidence Test as Rivals Chip Away at Its Customer Base
Published on 09/17/2026 at 08:31 | Editorial boerse-global.de
CATL has put its money where its management's optimism lies. The battery giant executed its first-ever share repurchase on September 11, snapping up 604,293 A-shares on the Shenzhen exchange at prices ranging from 330.15 to 331.61 yuan — a transaction worth just under 200 million yuan. Shareholders had already greenlit a buyback framework worth between 20 billion and 40 billion yuan on August 12, with the repurchased stock slated for cancellation and a corresponding reduction in registered capital.
The timing says plenty. The buyback lands as CATL's stock trades at its weakest level in a year, closing yesterday at 305.48 yuan after a 3.4% slide — a whisker away from the 52-week low of 299.00 yuan touched on September 16. Over the past 30 days the shares have shed 23%, and they sit 17% lower year-to-date. The relative strength index reads 22.1, deep in oversold territory.
What's Really Spooking Investors
The selloff has a concrete trigger: mounting concern that major customers are diversifying away from CATL. Li Auto and Xiaomi are increasingly shifting battery procurement toward rival suppliers and in-house systems, undermining the very foundation of CATL's market power — tight customer relationships and the pricing leverage they confer.
Li Auto's move is the most visible. The automaker announced it will integrate its self-developed battery technology across its entire model lineup starting September 7. Yet the rupture is partial, not total: Li Auto confirmed that initial deliveries of its new MEGA generation will still use CATL's 5C ternary lithium cells. Customers who placed orders after 3:00 p.m. on announcement day will instead receive the in-house batteries, with deliveries beginning in November. How quickly that substitution spreads to other buyers will shape CATL's earnings trajectory in the quarters ahead.
Media reports have added fuel to the fire, circulating speculation about production cutbacks in September and a potentially weaker net profit per unit in the third quarter.
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The Operational Picture Tells a Different Story
Those worries stand in sharp contrast to CATL's recent financial performance. In the first half of 2026, revenue jumped 54.80% to 276.92 billion yuan, while net profit attributable to shareholders climbed 41.98% to 43.28 billion yuan. The figures date from July, but they underscore that the company's operating base remained intact even as its share price came under siege.
The stock now trades 35% below its 52-week high from May 7, 2026, and 18% under its 50-day moving average. Investors face a binary question: is the customer exodus a structural break, or is the market overpricing a temporary competitive phase?
Counterweights to the Bear Case
Several developments argue against a permanent decline. China's State Administration for Market Regulation on Tuesday approved a battery-related transaction involving CATL, a move that could further consolidation in the sector. The regulator also cleared CATL's acquisition of an undisclosed stake in Chongqing Yaoning New Energy Technology, a Geely-backed battery maker currently building out its own manufacturing capacity — a chance for CATL to shore up its position in China's supply chain as competitors and customers alike build in-house battery expertise.
On the pricing front, CATL raised list prices for its 314 Ah energy storage cells from 0.414 to 0.423 yuan per watt-hour — evidence that it retains pricing power in the storage business even as pressure builds in the automotive segment. A strategic cooperation agreement with Taijin New Energy adds another diversification avenue beyond the core customer business.
Product momentum hasn't stalled either. At IAA Transportation 2026, CATL unveiled its TECTRANS II system, aimed at accelerating electrification of commercial vehicles worldwide — a signal that the company is pressing ahead with its growth strategy in the truck segment despite the share-price weakness.
Deeper Cracks in the Foundation
The risk runs deeper than any single customer relationship. The US transportation authority criticized Ford's reliance on CATL-licensed technology at its Michigan plant, citing CATL's inclusion on a Pentagon list of companies with alleged ties to the Chinese military — a political liability that could push Western automakers toward caution. Meanwhile, CATL Chairman Robin Zeng has warned that shortened development cycles among Chinese EV makers and price competition are contributing to quality problems and potential battery failures in the domestic market.
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Should that quality debate intensify while customers like Li Auto and Xiaomi expand their in-house efforts, the erosion of CATL's customer base could accelerate rather than level off.
The Next Real Test
As long as CATL holds pricing power in storage and keeps buying back stock, the current weakness looks like an oversold correction — the RSI of 22.1 points to room for a technical rebound. But if substitution dynamics spread beyond Li Auto to additional buyers like Xiaomi, the thesis of structural margin erosion gains credibility.
A concrete checkpoint arrives with the September launch of first customer deliveries of CATL's sodium-ion energy storage systems, through which the company is targeting GWh volumes this year. A successful market entry could serve as a diversification signal, loosening its dependence on the contested core customers. Whether management's buyback bet pays off hinges largely on whether the fears about production cuts and customer losses are confirmed — or prove overstated — in the coming quarterly numbers.
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