UBS has released a research report increasing its battery sales forecast for CATL (03750) for this year and next by 5% to 7%, to 829–1,044 GWh. The firm also raised its net profit forecast by 5% to 7%. Maintaining the 2026 forecast price-to-earnings ratio, UBS lifted the target price from HK$640 to HK$660 and reiterated a "Buy" rating.

The report’s 2026 battery teardown analysis covered CATL’s Shenxing Superfast Charging battery and Kirin battery, among others, finding that the company maintains a competitive cost advantage in both domestic and overseas production. Based on the teardown, UBS estimates that producing the same type of battery in Hungary could cost US$10–15/kWh more than in China, but expects the Hungarian plant’s operating margin to be close to that of domestic facilities.

UBS believes CATL’s global leadership in cost, scale, and technology positions it to benefit from multiple growth opportunities as electric vehicle adoption accelerates, energy storage systems expand, and new applications emerge. The report forecasts that CATL’s cost curve in Hungary will be lower than in Germany, with operating margins at the Hungarian plant largely in line with domestic operations, supported by European market premiums, highly automated production, and moderately rising labor costs.

With its leading and growing global market share, UBS expects CATL to be a key beneficiary of increasing global EV penetration, faster electrification of commercial vehicles, and expansion into applications such as energy storage, data centers, and robotics. The firm projects CATL’s revenue and earnings to grow at a compound annual growth rate of 20% and 25%, respectively, from 2024 to 2029.