Chinese battery manufacturer CATL reported continued expansion in its energy storage business in the third quarter of 2026, with storage batteries accounting for about 25% of its total battery sales volume, according to financial results released on Oct. 20 and a subsequent investor briefing.
CATL said combined sales of electric-vehicle and energy storage batteries exceeded 260 GWh in the July-September period. Based on the reported proportion, that implies energy storage battery sales of about 65 GWh, which would represent year-on-year growth of nearly 60%.
The expansion comes as CATL broadens its energy storage business beyond battery cells and DC-side equipment. During the investor briefing, management said its portfolio increasingly includes AC-side products and integrated storage systems, reflecting a shift toward more comprehensive project solutions.
The transition has also affected working capital. CATL said integrated storage products typically have longer delivery and revenue-recognition cycles than standalone battery cells, contributing to an increase in inventory.
Margin pressure
The company’s third-quarter revenue rose 58.6% year on year to CNY 165.22 billion ($24.7 billion), while net profit attributable to shareholders increased 14.5% to CNY 21.25 billion. Its net profit margin fell to about 12.9%, from 17.8% a year earlier.
For the first nine months, revenue reached CNY 442.14 billion, up 56.2%, while attributable net profit rose 31.6% to CNY 64.53 billion.
Management attributed the change in third-quarter unit profitability to shifts in product mix, a consumption tax and changes to export tax rebates. CATL said it is discussing cost-sharing arrangements with customers and accelerating the introduction of new technologies and products to mitigate the impact.
The company did not disclose separate quarterly revenue or profitability figures for its energy storage business, making it difficult to determine how much of the margin pressure came from storage rather than automotive batteries.
CATL reported inventory of CNY 144.77 billion at the end of September, up 53.2% from the end of 2025. Operating cash flow for the first nine months fell 23.6% year on year to CNY 61.63 billion, partly reflecting measures to accelerate payments to suppliers.
Demand outlook
CATL maintained a positive outlook for battery demand in 2027 despite concerns about slower growth in the EV sector. Management said energy storage demand continued to expand in China and international markets, with particularly strong activity in some overseas regions.
CATL also expects capacity utilization to remain relatively high as additional manufacturing capacity comes online.
The outlook follows a sharp expansion in the wider storage battery market. InfoLink Consulting reported global energy storage cell shipments of 467.84 GWh in the first half of 2026, up 94.8% year on year, with CATL retaining the top position among suppliers.
The post CATL profit growth slows to 15% as storage share of sales rises appeared first on Energy Storage.
