CATL and Geely face shifts in China's battery sector

CATL shares fell over 3% to a low not seen since mid-March, amid reports that Chinese authorities have largely suspended the acceptance of new capacity filings for power and energy storage batteries in the second half of the year. The decline is further compounded by reports that Chinese automakers are accelerating the development of in-house batteries. For instance, Xiaomi has entered strategic battery partnerships with CALB and Sunwoda, while Li Auto has increased its stake in Sunwoda.

Separately, Geely is reportedly reorganizing its battery business units. Internal sources suggest that several battery-related enterprises may be merged into the Geely Auto listed company once they meet profitability requirements. This move aligns with Geely’s ‘One Geely’ strategy, which aims to optimize resource allocation, reduce redundant projects, and enhance synergy across the group. This follows the recent approval of CATL’s acquisition of Chongqing Yaoning New Energy Technology, a company linked to Geely’s ecosystem.