In the first half of the year, CATL's production capacity utilization rate approached 90%, and by October, it was nearing full capacity.

Multiple Chinese automakers have reportedly sent procurement teams to CATL's headquarters, crowding its sales office in a bid to secure battery supply ahead of the anticipated reduction in new energy vehicle (NEV) purchase tax subsidies in the final sales quarter.

Unlike the widespread battery shortages of 2021-2022, the current supply constraints are concentrated in CATL's high-nickel system premium products. These batteries are primarily used in mid-to-high-end models priced above 300,000 yuan, such as NIO's ES8, Li Auto's i8, Xiaomi's YU7/SU7 Ultra/Max editions, and AITO's M7/M8/M9 pure electric versions.

Several factors contribute to this structural supply shortage: - Some models saw unexpectedly high demand upon launch, exceeding automakers' initial projections. - China's NEV purchase tax subsidies are set to phase out in January next year, prompting automakers to preemptively stockpile batteries. - CATL's battery system capacity utilization rose to nearly 90% in H1 and further increased by October. - Surging energy storage demand has further squeezed power battery capacity.

An industry insider noted, "It's now a battle for batteries—every additional vehicle delivered in Q4 means extra revenue." CATL reportedly prioritizes automakers with full-line adoption and large order volumes, offering them guarantees and discounts.

Due to the influx of advance orders, even second-tier battery manufacturers have seen their premium production lines fully booked. Some production lines are operating at 110% capacity, exceeding normal limits. With CATL nearing full capacity, any increase in energy storage battery output comes at the expense of power battery production.

In October, CATL's energy storage battery shipments accounted for over 20% of total output. Sources close to the company revealed that energy storage demand surged around mid-year, driven primarily by orders from South America and the Middle East, with some overseas contracts extending into Q2 2025.

Battery manufacturers typically follow a "T+3" procurement model, locking in materials and orders three months in advance. CATL reportedly ramped up purchases of lithium iron phosphate (LFP) materials for energy storage mid-year, inadvertently limiting short-term expansion for popular LFP-powered vehicle models.

CATL is expanding production, with domestic bases in Shandong Jining, Guangdong Zhaoqing, Jiangxi Yichun, and Fujian Xiamen. Its Hungary Phase 1 project is expected to complete by late 2025, while a Spanish factory is in preparation, and an Indonesian battery project is slated for H1 2026.

However, these long-term plans cannot address immediate shortages. Moreover, with NEV penetration exceeding 50%, excessive short-term expansion risks idle capacity if demand cools next year.