Recent market rumors regarding Contemporary Amperex Technology Co., Ltd.'s (CATL) potential acquisition of Huawei Digital Energy have taken a new turn. Previously, a Huawei executive responded to media inquiries about the rumors by stating they were "unclear and likely untrue." CATL did not provide a comment.
Recent reports now indicate that while discussions between the two parties did occur, a full acquisition is unlikely due to the high overall cost. Instead, CATL is reportedly considering acquiring approximately a 20% stake in Huawei Digital Energy. As of now, neither CATL nor Huawei has officially responded to these new stake acquisition rumors.
Despite the shift in this acquisition speculation, CATL's keen interest in Huawei Digital Energy is well-founded. It is understood that previous negotiations encountered several disagreements, primarily concerning the valuation of the target assets and the acquisition strategy. Market rumors suggested Huawei Digital Energy was valued at around 400 billion yuan, while CATL was only willing to offer 150 billion yuan. This significant valuation gap hindered smooth progress, leading both sides to consider alternative structures, such as introducing state-owned capital to establish a platform company to facilitate the deal.
Furthermore, there were internal rumors that Huawei Digital Energy employees could receive severance packages as high as N+5 or even N+9 upon departure. However, a turning point occurred on February 6th, when multiple Huawei Digital Energy employees indicated that an internal notification was circulated on the evening of February 5th stating the business would no longer be sold.
In terms of overall valuation, Huawei Digital Energy operates on a large scale. Its business is primarily divided into three major segments: new power system energy infrastructure, new electric mobility energy infrastructure, and new digital industry energy infrastructure. It mainly deals in equipment such as photovoltaic devices, charging piles, and inverters. Huawei Digital Energy achieved a 24.4% growth rate in 2024, with revenue reaching 68.678 billion yuan. This scale surpasses that of many independent energy listed companies. For comparison, Sungrow Power Supply Co., Ltd. reported 2024 revenue of 77.857 billion yuan, a year-on-year increase of 7.76%, with a latest market capitalization exceeding 300 billion yuan.
Reviewing the rumors between CATL and Huawei Digital Energy offers insight into the动向 and ambitions of the world's largest power battery supplier. As the global leader in power batteries, CATL ranked first worldwide in 2025 power battery shipments, exceeding 500 GWh and capturing over 30% of the global market share, according to a white paper.
Following its secondary listing in Hong Kong, CATL has aimed to project an image as a builder of a zero-carbon energy ecosystem. Beyond facing a highly competitive power battery industry characterized by overcapacity, intense price wars, slowing growth, and customer concentration, CATL also confronts competition from players like BYD and CALB externally, necessitating the exploration of new growth avenues.
Energy storage represents the optimal strategic choice. CATL officially announced the mass production and delivery of its next-generation energy storage-specific battery cell with a capacity of 587Ah in June last year. However, despite this differentiated strategy, going it alone still requires breakthroughs on the AC side. While the company holds an absolute advantage in battery cells, it faces significant shortcomings in AC-side capabilities such as inverters, system integration, software dispatch, and grid compatibility.
In the first three quarters of 2025, CATL's energy storage system shipments did not rank within the global top ten list published by InfoLink, and the company has long operated in the low-margin segment of cell suppliers, facing pressure from vertically integrated players like BYD.
Although CATL, through its wholly-owned subsidiary TeraSource, launched a PCS product, signaling a move beyond providing DC-side solutions and into AC-side territory, progress has been limited.
Should cooperation between the two parties materialize, it would help CATL further build a complete, closed-loop energy storage ecosystem. This would represent an upgrade from simply selling battery cells or storage cabinets to providing integrated energy storage solutions, significantly enhancing product value-added and customer loyalty. It would also enable rapid entry into the mainstream global energy storage market, particularly high-value markets in Europe and the US, while bypassing the long cycle and substantial R&D investment required to build system and software capabilities from scratch.