What's Happening?
In the first half of 2026, China installed 335.6 gigawatt-hours of power batteries in new energy vehicles, marking a 12% increase from the previous year. The five largest suppliers, including CATL, accounted for 80.4% of the installed capacity, with CATL alone
holding a 46% share. Automakers are increasingly adopting dual and multi-supplier strategies to manage costs and supply risks. This shift is driven by the need to control battery procurement costs, which constitute 30-40% of an electric vehicle's component costs. Companies like Li Auto and Leapmotor are leading this trend, sourcing batteries from multiple suppliers to enhance bargaining power and maintain quality.
Why It's Important?
The move towards diversified battery sourcing reflects a broader trend in the automotive industry to mitigate supply chain risks and manage costs more effectively. As competition intensifies, automakers are seeking to balance production capacity among suppliers while maintaining quality. This strategy not only helps in cost management but also strengthens the automaker's position in negotiations with suppliers. The trend is likely to influence global supply chains, as China continues to dominate the battery and electric vehicle market, attracting significant global investment.
What's Next?
As the industry moves towards diversified procurement, automakers are expected to continue expanding their supplier networks. This could lead to increased competition among battery manufacturers and potentially drive innovation and cost reductions in battery technology. The trend may also encourage other regions to adopt similar strategies, impacting global supply chains and market dynamics.
