Analysis of CATL's Energy Storage Business: Can It Become a New Growth Driver?

As a leading enterprise in the global power battery and energy storage battery sectors, CATL’s energy storage business has become its second-largest revenue source. According to the latest data, the energy storage business accounts for about 20% of the company’s total revenue and shows a rapid growth trend[1].

From the order perspective, CATL’s energy storage system shipments reached 93GWh in 2024, and by the end of 2025, the company had secured more than 300GWh of energy storage orders, with the order scale increasing by over 220% year-on-year[2]. This growth rate far exceeds the industry average, showing strong momentum in the energy storage business. Notably, CATL has maintained the global No.1 position in energy storage battery shipments for four consecutive years, with a stable market position[2].

From the revenue perspective, the company’s total revenue in 2024 was approximately 362 billion yuan, and the energy storage business revenue was about 72.4 billion yuan. Based on existing orders in 2025, assuming the unit price remains unchanged, the energy storage business revenue is expected to reach about 233.5 billion yuan, achieving significant growth. This data indicates that the energy storage business is transforming from a “supplementary business” to a “core growth engine”.

The global energy storage market is in an explosive growth stage. According to data from Zhongyan Puhua Industry Research Institute, the global lithium battery market size is expected to exceed 1.2 trillion yuan in 2025, of which power batteries account for about 70%, and energy storage batteries’ share will quickly rise to over 20%[3]. The International Energy Agency predicts that by 2030, the global electric vehicle ownership will exceed 300 million units, and the demand for supporting power batteries will exceed 3000GWh, with an annual compound growth rate (CAGR) of over 25%[4].

From the perspective of segmented markets, the energy storage industry shows several notable trends. First, long-duration energy storage has become a future development direction, and 500+Ah large cells are expected to account for 25% of the market share in 2026[5]. Second, modular energy storage cabinets have become an important trend, supporting flexible deployment from megawatt to gigawatt levels, and combining artificial intelligence technology to improve system intelligence. Third, next-generation technologies such as sodium-ion batteries and solid-state batteries will gradually enter the commercialization introduction period after 2027, opening a new round of technology competition[4].

In terms of market growth rate, global energy storage shipments are expected to increase by 80% year-on-year in 2025. Although the growth rate may drop to about 40% in 2026, the overall market is still in a high-growth channel[5].

CATL dominates the global battery market. According to SNE Research data, from January to October 2025, six Chinese battery manufacturers accounted for 68.9% of the global electric vehicle battery installed capacity, with CATL ranking first globally with a 36% market share[6]. BYD ranked second with about 16% share, while LG Energy Solution and Panasonic accounted for about 13% and 7% respectively.

CATL’s competitive advantages are mainly reflected in the following aspects:

: The company continues to invest in R&D and maintains leadership in key indicators such as battery energy density, cycle life, and safety performance. Over the past decade, lithium battery costs have dropped by nearly 90%, and energy density has increased by more than three times. CATL expects that there will still be a 20% to 30% cost reduction space for batteries from 2026 to 2030[4].

: As the world’s largest battery producer, CATL has a significant scale effect, which can effectively reduce unit costs and improve profit margins. The company’s layout in the Jiangxi Jianxiawo Lithium Mine also ensures the stability of upstream raw material supply[2].

: CATL has established production bases and cooperative relationships in many important global markets. For example, the company’s 19GWh AIDC energy storage project in the UAE has been launched, which helps avoid trade barriers and expand overseas markets[5].

: The company has long supplied batteries to globally renowned automakers such as Tesla, BMW, and Mercedes-Benz, establishing stable customer relationships and brand reputation[6].

From multiple dimensions, CATL’s energy storage business has the potential to become a new growth driver:

: In 2025, energy storage orders increased by over 220% compared to 2024, far higher than the industry average growth rate of 80%. This reflects the market’s high recognition of CATL’s energy storage products and the company’s strong ability to obtain large orders[2].

: In the global energy storage battery market, CATL has ranked first for four consecutive years, and its market share is expected to further increase. As the energy storage market shifts from “price war” to “joint price support”, leading enterprises will gain more profit space[3].

: More than 130 countries around the world have put forward carbon neutrality goals. As the core of transportation electrification, power batteries, and as the key to large-scale utilization of renewable energy, energy storage batteries are experiencing certain growth[4].

: The company is actively laying out next-generation battery technologies, including sodium-ion batteries and solid-state batteries, which will lay a technical foundation for long-term development. It is expected that after 2027, these new technologies will gradually enter the commercialization stage[4].

Despite the broad prospects, CATL’s energy storage business still faces some risk factors:

: As more and more enterprises enter the energy storage track, coupled with the competitive counterattack of overseas local enterprises, market competition is becoming increasingly fierce. System prices in some regions such as North America have dropped by more than 20% within the year, and price war pressure continues to exist[5].

: Although there are opportunities in overseas markets, there are also “hidden risks” such as policy instability and payment collection risks. Policies such as the U.S. Inflation Reduction Act may affect the company’s overseas business expansion[6].

: Price fluctuations of key raw materials such as lithium, cobalt, and nickel may affect the company’s cost structure and profitability. Although the company has laid out upstream lithium mines, price risks still need to be monitored.

: There are uncertainties in the R&D progress and commercialization time of next-generation battery technologies, which may affect the company’s technological leadership position.

Based on the above analysis, CATL’s energy storage business has the conditions and potential to become a new growth driver:

: The company’s comprehensive competitiveness in technology, scale, customer resources, etc., provides a solid foundation for the development of the energy storage business. The position of being the global No.1 in energy storage battery shipments for four consecutive years is difficult to be easily shaken.

: The growth of over 220% in orders far exceeds the industry average, showing the market’s high recognition of the company’s products. With the gradual delivery of existing orders, the contribution of the energy storage business to revenue and profit will continue to increase.

: Global energy transition and carbon neutrality goals provide long-term growth momentum for the energy storage industry. Even if the industry growth rate drops to about 40% in 2026, it is still a high-growth field.

: The current price-to-earnings ratio is about 26.64 times. Considering the company’s industry position, growth potential, and profitability, the valuation has a certain margin of safety.

: CATL’s energy storage business has shown the potential to become a new growth driver. Investors are advised to focus on the order execution status, gross profit margin changes, and overseas business expansion progress of the energy storage business. For long-term investors, allocating to CATL at the current position has high investment value.

[1] Sina Finance - “CATL Signs Another Big Order, 32 Lithium Battery Concept Stocks ‘Ready to Move’” (https://finance.sina.com.cn/tech/roll/2025-12-26/doc-inhecmrf8029177.shtml)

[2] 36Kr - “CATL Signs Another Big Order, 32 Lithium Battery Concept Stocks ‘Ready to Move’” (https://m.36kr.com/p/3612177250660866)

[3] Lanfu Finance Network - “CATL Signs Another Big Order, 32 Lithium Battery Concept Stocks ‘Ready to Move’” (https://www.sinax.com.cn/article-12673-1.html)

[4] Securities Times - “CATL Signs Another Big Order, 32 Lithium Battery Concept Stocks ‘Ready to Move’” (www.stcn.com)

[5] Phoenix Finance - “Price Hike Wave and Expansion Wave Coexist! Energy Storage Surges: Global Shipments Expected to Increase by 80% in 2025” (https://h5.ifeng.com/c/vivoArticle/v002--YUg35hBwOH6TPNMre9dRU1aADqPekYPZc9l8TxNv3E__)

[6] CarbonCredits - “China Now Controls 69% of the Global EV Battery Market as CATL and BYD Surge in 2025” (https://carboncredits.com/china-now-controls-69-of-the-global-ev-battery-market-as-catl-and-byd-surge-in-2025/)