Shares of CATL surged +11.2% to HK$557.00 on September 18, snapping a steep two-day selloff, after the world's largest EV battery maker disclosed it repurchased 3.1 million A-shares for 947 million yuan on September 16. The move is part of a far larger program — and the question for investors is whether management's cash can outrun the structural cracks appearing in its customer base.
The Selloff Was Triggered by Real Customer Defections, Not Just Sentiment
CATL's shares had dropped roughly 10% in two days as market chatter about possible September output cuts and falling unit profits collided with concerns that automakers were diversifying their battery supply chains. The worry is specific: Li Auto and Xiaomi are accelerating efforts to diversify their battery suppliers , and Li Auto announced its self-developed batteries will gradually roll out across its entire lineup from the second half of 2026. When your biggest customers start making their own product, no buyback erases that.
A Record War Chest Backs the Buyback — But It's Still Early Days
CATL's total buyback authorization ranges from 20 billion to 40 billion yuan — up to roughly $5.9 billion — setting a new record for a single cancellation-style buyback in the A-share market. Cancellation means the repurchased shares are permanently retired, directly boosting each remaining shareholder's slice of earnings. Yet spending 947 million yuan so far represents less than 5% of the floor amount. The pace needs to accelerate sharply to send a lasting signal.
The Underlying Business Is Still Growing Fast
CATL posted first-half net profit of 43.28 billion yuan, up 42% year-on-year , while revenue hit 276.92 billion yuan, up 54.8%. Crucially, energy storage revenue surged 87.5% to 53.26 billion yuan with a 24% gross margin — higher than the core auto-battery business. That fast-growing storage segment gives CATL a hedge if EV customers continue to bring battery production in-house.
Pricing Power Remains — For Now
CATL recently raised list prices for its energy storage cells from 0.414 to 0.423 yuan per watt-hour , a move that suggests it can still dictate terms in storage even as auto-battery competition heats up. The company holds a 50.1% domestic market share as of Q1 2026 and a 39.2% global share.
If customer substitution spreads beyond Li Auto to buyers like Xiaomi, the case for durable margin erosion becomes harder to dismiss.