Battery Cells

What it is

A battery cell stores energy in a stack of cathode, anode, separator and electrolyte, and is assembled into packs and systems. The cathode is made from lithium compounds, as covered under cathode materials. Cells now go to two markets: electric vehicles and grid or industrial energy storage, where they are built into storage systems alongside power conversion systems.

How big the market is

Global EV battery installations were 608.5 GWh in the first half of 2026, up 20.0%, according to SNE Research. China's were 335.6 GWh, up 12.0%, according to China's battery innovation alliance, about 55% of the global figure (our calculation) (CALB 2026 interim results, p. 12). Storage is growing much faster: InfoLink put global storage cell shipments at 467.8 GWh, up 94.8%, in the same half (p. 13).

Who makes them

Four listed companies show the range:

• CATL (宁德时代, 300750.SZ) says it had 40.2% of global power battery use in January to May 2026 according to SNE Research, and that its storage shipments have ranked first for five years. Revenue was ¥276.9bn, up 54.8%, with a net profit of ¥43.28bn. It has 525 GWh of capacity running at 94.86% utilisation and 764 GWh more under construction (2026 interim report, pp. 7, 10, 13, 17).
• BYD (比亚迪, 002594.SZ) makes its own batteries for its vehicles and for storage. Its batteries are not reported separately, so its cell business cannot be sized from the filing. It signed an 11.275 GWh storage agreement with Masdar (2026 interim report, pp. 14, 21).
• EVE Energy (亿纬锂能, 300014.SZ) ranked seventh in global power battery installations by SNE Research, with installations up 51.7%, and second for commercial vehicles. Revenue was ¥45.69bn, up 62.2% (2026 interim report, pp. 8, 14).
• CALB (中创新航, 3931.HK) had revenue of ¥27.08bn, up 65.0%, of which storage products and others were ¥10.58bn (CALB p. 7).

Margins: scale shows

Only some report margins by business:

• CATL: power batteries 20.63%, storage 23.96%.
• EVE: power batteries 16.19%, storage 12.51%.
• CALB: whole company about 16.7% (our calculation).

CATL's overseas revenue also earned a 29.97% margin, against 21.16% in China (CATL p. 16). Storage is the faster-growing business at all three: CATL's storage revenue rose 87.5% against 46.0% for power batteries, EVE's 69.2% against 53.3%, and CALB's storage and other products 83.8% against 54.8% for EV batteries (CATL p. 16, EVE p. 19, CALB p. 7).

Our view: the cell makers are growing fast in a market that is itself growing, but the margins separate them. CATL earns 20% to 24% while its smaller rivals earn 13% to 17%, and the gap is widest in storage, where the leader earns almost twice the margin of EVE. The first-half figures suggest scale and overseas sales, rather than market growth, decide who keeps the margin.

What to watch

• Storage mix. Storage cells are growing faster than vehicle cells; where margins sit within storage will decide profits.
• Capacity. CATL has 764 GWh under construction and EVE plans about 260 GWh of new capacity, which is large next to CATL's 525 GWh today (CATL p. 17, EVE p. 13).
• Sodium-ion. CATL's three-year, 60 GWh sodium storage cooperation agreement and EVE's planned batch deliveries are the first commercial steps (CATL p. 14, EVE p. 14).
• Raw material cost. Cell margins depend on the cathode and lithium prices upstream.