Chinese EV makers seek control over battery supply chains

Chinese electric vehicle (EV) manufacturers are increasingly seeking to reclaim control over battery technology and pricing power to combat shrinking profit margins. While battery suppliers like CATL maintain dominant market shares and high profitability, automakers are shifting from simple procurement to deep strategic integration.

Li Auto has significantly deepened its ties with Sunwoda Mobility, investing 2.65 billion yuan to become its second-largest shareholder. This move allows Li Auto to lead technical definitions and system development while outsourcing manufacturing, a strategy described as ‘self-research without self-manufacturing.’ Similarly, XPeng has announced plans to take more control over its battery technology, and Leapmotor has moved toward 100% in-house development and production of standardized cells to reduce costs.

This shift is altering the relationship between automakers and major suppliers. While CATL remains a global leader, many manufacturers are diversifying their supply chains to include multiple providers like CALB or Sunwoda to reduce dependency. The industry is moving toward a model where automakers define the technical standards and integration, while specialized battery firms focus on high-scale manufacturing and cell production.