CATL Q4 Report: Revenue and Profit Hit Record Highs, Can the Growth Legend Continue in 2026?

CATL’s recent Q4 2025 financial report has attracted significant market attention. Data shows that the company’s quarterly revenue reached 140.63 billion yuan, a year-on-year increase of 36.6%, far exceeding the market expectation of 125 billion yuan; net profit attributable to shareholders was 23.17 billion yuan, with a healthy gross profit margin of 28.2%. This performance not only boosts confidence for the A-share annual report season but also, with an impressive full-year net profit of 72.2 billion yuan, broke the market’s previous expectation of 69 billion yuan, leading to a 6% rise in stock price at the opening the next day.

Power battery business remains the core growth engine. In 2025, CATL’s power battery sales reached 541 GWh, accounting for 82% of total battery sales of 661 GWh, with Q4 shipments hitting a new quarterly high of 192 GWh. This achievement is attributed to multiple factors: the “tail effect” from the pre-subsidy decline for new energy vehicle purchases stimulating automakers’ inventory buildup, order front-loading during the lithium battery price rise cycle, and strong demand for high-capacity batteries for new models. Management revealed at the earnings conference that the global market share of power batteries has risen to 39.2%, supported by technological advantages and capacity utilization rates exceeding 100%, enabling the company to remain resilient amid demand fluctuations.

Energy storage business is becoming the second growth pillar. In 2025, energy storage battery sales reached 121 GWh, a 29.1% increase year-on-year, with profit margins significantly higher than those of power batteries. As AI computing infrastructure investments surge, the demand for energy storage systems to ensure energy stability is exploding. With CATL’s leading global shipment market position, it is expected to continue benefiting from this wave of technological dividends. Management specifically pointed out that energy storage cells have a “sweet spot” in scale effects, where large-cell solutions can effectively reduce costs and open space for profit margin improvements.

In the face of raw material price fluctuations, CATL demonstrates strong risk resistance. The company has built a cost moat through three approaches: first, establishing a price transmission mechanism with downstream customers to partially transfer lithium price fluctuation risks; second, holding over 8 billion yuan in direct mineral rights assets, combined with mineral rights in long-term equity investments, forming strategic resource reserves; third, accelerating layout in multi-material technologies such as sodium batteries to reduce dependence on a single material. These measures enable the company to maintain record-high contractual liabilities during lithium price uptrends, with all short-term capacity already locked in.

Capacity expansion and inventory management show positive signals. Despite total inventory reaching a record high of 94.5 billion yuan, turnover days decreased by 0.54 days compared to Q3, indicating balanced production and sales. Capital expenditure for the year increased by 35.8%, with 321 GWh of capacity under construction; new projects signed at the beginning of the year have not yet been fully accounted for, reflecting management’s strong confidence in future demand. Regarding expense control, the Q4 three-expenses ratio dropped to 8.4%, a decrease of 70 basis points year-on-year and 10 basis points quarter-on-quarter, further boosting net profit margins.

In terms of shareholder returns, CATL shows rare generosity. The company not only distributes dividends based on 20% of profits but also pays an additional 30% special cash dividend, totaling 50% of net profit returned to shareholders. This dividend strategy is uncommon among manufacturing companies and reflects strong confidence in cash flow quality.

Behind this nearly perfect financial report, industry challenges are also implied. As the growth rate of the new energy passenger vehicle market slows and uncertainties increase around technologies like solid-state batteries, CATL is building new competitive barriers through a dual-driven approach of “power batteries + energy storage,” along with upstream resource control and diversified technological layout. Management emphasized a “conservative” philosophy at the earnings conference, which may be key for this industry leader to maintain resolve during industry turning points—staying sober amid celebration and holding onto core advantages amid transformation.