Eight listed Chinese power battery makers have released their first-half 2026 financial results, revealing a stark contrast with the broader automotive industry. While automakers grapple with declining sales volumes and squeezed profitability, these suppliers delivered robust earnings, with seven of the eight reporting revenue growth and six posting higher profits.

The collective net profit of the eight companies — Contemporary Amperex Technology Co. Ltd. (CATL), EVE Energy Co. Ltd., Sunwoda Electronic Co. Ltd., Gotion High-tech Co. Ltd., CALB Group Co. Ltd., Rept Battero Energy Co. Ltd., Zhenli New Energy Co. Ltd., and Farasis Energy (Gan Zhou) Co. Ltd. — reached 508.46 billion yuan (approximately $71 billion) in H1 2026. This figure stands in sharp contrast to the 251 billion yuan (approximately $35 billion) earned collectively by 23 major listed automakers during the same period. In other words, these eight battery suppliers earned double the profits of 23 automakers, and their average per-company profitability was more than six times higher.

Net profit margins tell a similar story. The average profit margin for automakers' manufacturing operations plummeted to 1.5% in the first half of 2026, a decade low. In comparison, the eight battery makers averaged a gross margin of 13.6%, nine times higher than their automotive counterparts.

Despite these impressive headline numbers, underlying challenges are emerging. Seven of the eight companies experienced a decline in gross margins. Zhenli New Energy saw the sharpest drop of 5.4 percentage points, while EVE Energy's margin fell by more than 3 percentage points. CATL, Gotion High-tech, and Sunwoda also reported varying degrees of margin contraction, reflecting intensifying competition and rising input costs that are squeezing profitability across the sector.

Energy storage has become an increasingly important growth driver for H1 2026, though with significant divergence among players. Six of the eight companies posted revenue growth in this segment, with Zhenli New Energy leading the pack with a staggering 799% surge, while EVE Energy recorded the slowest growth at about 70%. However, Gotion High-tech bucked the trend, seeing its storage revenue fall by 19%, and Farasis Energy has largely stayed out of the storage market altogether. Rept Battero has the highest storage revenue share at 62%, making it the only battery maker where storage is the dominant business. Sunwoda has the lowest at just 4.6%.

Overseas expansion has become a key strategy for battery makers to offset intense price competition in the domestic market. Farasis Energy leads with 63.5% of its revenue coming from international markets, making it the only one with a foreign-market-dominated business. At the other end, CALB derives only 4.4% of its revenue from overseas, while most other players fall in the 25% to 35% range. Overseas gross margins generally exceed domestic ones across the sector: CATL's overseas margin reached 29.97%, while EVE Energy and Gotion High-tech both reported higher overseas margins than their overall figures. However, Farasis Energy's heavy reliance on international markets has exposed it to risks from export tax rebate adjustments and US tariff policies.

CATL unsurprisingly remains the industry's undisputed leader. The company generated revenue of 2769.2 billion yuan (approximately $387 billion) in H1 2026, up 54.8% year-on-year, with net profit attributable to shareholders reaching 432.8 billion yuan (approximately $60.5 billion), a 42% increase. It alone accounted for over 85% of the total profits of the eight companies, translating to daily earnings of 1.19 billion yuan (approximately $166 million). Its power battery systems business brought in 1921.25 billion yuan (approximately $269 billion), up 46.02%, representing 69.4% of total revenue. CATL captured a 46.7% share of domestic passenger vehicle installations and 75.2% of the ternary lithium battery market. Its energy storage battery systems revenue grew 87.54% to 532.6 billion yuan (approximately $74.5 billion), accounting for 19.2% of revenue and establishing itself as a second growth pillar.

However, CATL's gross margin declined by 1.09 percentage points to 23.93%. The power battery segment's margin slipped 1.78 points to 20.63%, while storage margins eased 1.56 points to 23.96%. Notably, its overseas business posted strong results with revenue of 871.29 billion yuan (approximately $122 billion), up 42.35% year-on-year, and a gross margin of 29.97% — up 0.95 points. By comparison, domestic margins were just 21.16%.

EVE Energy ranks second in both revenue and profit, though the gap with CATL remains vast. Its H1 revenue reached 456.91 billion yuan (approximately $64 billion), up 62.2% year-on-year, merely 16.4% of CATL's figure. Net profit came in at 33.01 billion yuan (approximately $4.6 billion), surging 105.66% but just 7.6% of the leader's profit. The company shipped 35.76 GWh of power batteries, up 66.47%, driven by a boom in commercial vehicle batteries — 11.34 GWh installed, ranking second nationally. However, its passenger car installations of just 5.46 GWh failed to crack the top ten. Storage battery shipments rose 54.88% to 44.46 GWh, contributing 25% of revenue. Despite this growth, EVE Energy's overall gross margin fell 3.02 points to 14.31%, the lowest among leading battery makers. Its power battery margin dropped to 16.19%, while storage margins sank to a thin 12.51%.

Gotion High-tech posted the fastest profit growth in the sector. Revenue climbed 43.22% to 277.76 billion yuan (approximately $39 billion), while net profit soared 278.05% to 13.86 billion yuan (approximately $1.9 billion). Power batteries remain its primary revenue source at 225.97 billion yuan (approximately $31.6 billion), up 61.01%, with its share of revenue rising from 72.37% to 81.36%. The company's domestic installations reached 20.75 GWh, giving it a 6.2% market share and a first-ever top-three ranking in China. However, this segment carries the lowest gross margin across its businesses at 14.02%, down 0.22 points.

Interestingly, unlike its peers' robust storage growth, Gotion High-tech's storage business contracted. Storage revenue fell 19.14% to 36.89 billion yuan (approximately $5.2 billion), reducing its revenue share from 23.52% to 13.28%, even as industry-wide storage shipments jumped 97.5%. The company did not offer an explanation in its financial report. Overall gross margin slipped 0.82 points to 15.6%, though storage margins improved slightly to 19.5%.

CALB also delivered impressive profit growth, with revenue up 65% to 270.84 billion yuan (approximately $38 billion) and net profit rising 102.2% to 15.23 billion yuan (approximately $2.1 billion). The company attributed the gains to new customers, expanded use cases, and rising volumes of new products. Power battery sales accounted for 60.9% of revenue at 165.06 billion yuan (approximately $23 billion), up 54.8%, while storage system revenue grew 83.8% to 105.79 billion yuan (approximately $14.8 billion), representing 39.1% of the total. However, quality issues reported in July could pose challenges ahead.

Firms in the second and third tiers face the most critical question of how to survive in an increasingly entrenched duopoly dominated by CATL and BYD Co. Ltd. (whose battery business revenue and profits are not separately disclosed and therefore not included in this analysis). The remaining players — Sunwoda, Rept Battero, Zhenli New Energy, and Farasis Energy — each generated less than 10 billion yuan (approximately $1.4 billion) in H1 net profit.

Sunwoda exemplifies the "revenue growth without profit growth" pattern. Revenue rose 41.48% to 381.79 billion yuan (approximately $53.4 billion), but net profit fell 29.59% to approximately 6.03 billion yuan (approximately $840 million). Gross margin dipped 0.46 points to 15.33%. Its power battery segment was a bright spot, with revenue up 85.87% to 141.34 billion yuan (approximately $19.8 billion) and gross margin improving 8.59 points to 18.36% — the only core business with positive margin gains. Storage revenue grew 76.21% to 17.7 billion yuan (approximately $2.5 billion), though margins slipped 2.08 points to 18.18%. Its traditional consumer battery business, the largest revenue contributor at 144.52 billion yuan (approximately $20 billion), grew just 4.04% with margins down 4.95 points, attributed to memory chip price increases and shifting end-market demand. Sunwoda is currently pursuing a Hong Kong IPO, though its prospectus has lapsed twice without recent progress.

Rept Battero achieved a historic turnaround. After five consecutive years of losses from 2020 to 2024 and a first annual profit of 6.81 billion yuan (approximately $950 million) in 2025, the company posted H1 revenue of 149.16 billion yuan (approximately $21 billion), up 57.2%, and net profit of 7.78 billion yuan (approximately $1.1 billion), versus a loss of 0.63 billion yuan a year earlier. Storage batteries have become its primary growth engine: revenue hit 92.25 billion yuan (approximately $12.9 billion), up 81.5%, representing 61.9% of total revenue — the highest share among all battery makers — with shipments of 27.2 GWh, up 43.9%. Power battery revenue grew 29.8% to 52.25 billion yuan (approximately $7.3 billion), comprising 35% of total revenue, with installations ranking sixth domestically.

Zhenli New Energy delivered revenue of 54.38 billion yuan (approximately $7.6 billion), up 71.4%, with net profit of 3.72 billion yuan (approximately $520 million), up 68.6%. Power batteries contributed 84.2% of revenue at 45.77 billion yuan (approximately $6.4 billion), with shipments of 11.13 GWh. Its domestic passenger vehicle installation ranking improved from seventh in 2025 to fifth. Storage and other income reached 8.62 billion yuan (approximately $1.2 billion), with storage battery revenue growing nearly 8-fold to 5.9 billion yuan (approximately $825 million). However, its cost of sales surged 82.8% to 47.58 billion yuan (approximately $6.7 billion), outpacing revenue growth and dragging gross margins down from 17.9% to 12.5%, blamed on raw material cost increases and fierce competition.

Farasis Energy stands as the only company with declining revenue and persistent losses. H1 revenue fell 16.93% to 36.16 billion yuan (approximately $5 billion), with a net loss of 3.97 billion yuan (approximately $555 million), wider than the previous year. The company attributed the setback to business restructuring, shifts in customer delivery schedules, and product upgrade transitions. Its main business is almost entirely power batteries, which account for 92.78% of revenue, and it is the only company without a meaningful storage presence. Unlike its peers, Farasis Energy relies heavily on overseas markets, which contributed 63.54% of revenue — a vulnerability exposed by reduced export tax rebates, US tariffs, and currency fluctuations that turned prior foreign exchange gains into losses.

H1 2026 has demonstrated that power battery makers hold formidable pricing power within the new energy supply chain, with profitability far exceeding that of automakers. Yet, declining gross margins across the board, diverging fortunes in storage, offshore market volatility, and the fragile profitability of smaller players all point to a sector where the benefits of scale expansion are being steadily eroded by rising costs. The next competitive chapter will center on quality improvements and operational efficiency — a contest that has only just begun.