CATL made $10.4bn in profit last year — more than four major automakers combined

The company most car buyers have never heard of just posted the most profitable year in the EV supply chain. CATL — the Chinese firm that makes batteries for Tesla, BMW, and dozens of other brands — earned $10.4 billion in net profit in 2025, up 42% from the year before, per Automotive World. That figure exceeds the combined earnings of BYD, Chery, and two other large Chinese automakers — all of which sell millions of finished cars a year.

The supplier vs. the brand

CATL holds 39.2% of the global power battery market — a position it has held for nine consecutive years. Its customers include nearly every major EV maker on the planet. Yet it operates entirely out of the consumer spotlight, which may be exactly why its margins are so wide.

The contrast with actual car brands is stark. BYD, widely framed as Tesla's biggest rival, netted just $4.72 billion in 2025 — less than half of CATL's haul — and that figure was actually a 19% decline year-on-year, according to CnEVPost. Across the Chinese auto industry, average profit margins collapsed to 4.1% in 2025 and fell further to 2.9% in the first half of 2026. CATL's net margin: 17%. That's not a rounding difference — it's a structural one.

Why the supplier wins

Selling a finished car means competing on design, brand, financing, dealer networks, and after-sales service. Selling the battery means competing on chemistry, scale, and patents — a far smaller field with higher barriers to entry. CATL owns the lithium-iron-phosphate and lithium-nickel chemistry at scale that no Western competitor has matched. Northvolt, Europe's best-funded attempt at a rival, filed for bankruptcy protection in late 2024.

The premium is even more pronounced outside China. CATL's gross margin on overseas sales runs at 31.4%, compared to 24% domestically. That means every BMW i-Series or Tesla Model Y sold in the US or UK is quietly padding a Chinese supplier's balance sheet at rates the automakers themselves can't match.

For consumers, none of this changes what you pay at the dealership. But it does explain why the EV transition hasn't produced a Western battery champion — and why, for now, there isn't one on the horizon.