CATL's weak third-quarter margins may become the new normal, Daiwa warns
Daiwa cut its CATL rating to hold from buy, arguing that low profitability could persist due to weak cost pass-through and heavier tax burdens next year.
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what happened
Analysts at Daiwa, as reported by Market Talk, say the low profitability of Contemporary Amperex Technology in the third quarter could become its normalized margin level. They point to the earnings miss as evidence that the company struggles to pass costs on to customers, amid a soft outlook for new energy vehicle sales.
Daiwa also expects tax burdens to be more severe next year. The market is concerned that NEV makers developing their own technologies could decouple from CATL. With management giving little detail on future strategy or cost pass-through measures, Daiwa sees limited sentiment support in the near term. The firm downgraded CATL to hold from buy. The shares closed 7.8% higher at 237.60 yuan in Shenzhen.
why it matters
For the market, this signals that the largest battery maker faces pressure on margins, which matters for the electric vehicle supply chain and for investors in the sector. A single brokerage call usually affects the stock narrowly, but doubts about the durability of profits may linger until the company offers clearer plans.
market impact
CATL and battery makers: margin pressure and doubts over profits amid weak electric vehicle sales outlook
tags
instruments
sources
- CATL's Low Profitability in 3Q Could Be New Normal — Market Talk, 23 October 2026 at 07:39 UTC
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