On October 10, CATL surged more than 5% intraday and closed up about 3.84%. After nearly two months of adjustments with a cumulative drop of over 20%, the market seems to be reassessing the value of "Ning Wang."

Previously, the market's concerns were straightforward: automakers are developing their own batteries, so is CATL's order and pricing power about to be lost?

Li Auto says it will switch to all self-developed batteries, XPeng says they will make their own batteries, and Xiaomi is also jointly developing them. This panic over 'de-Ningde' once suppressed the stock price.

But if you look closely at the industry logic, you'll find that what automakers call 'in-house R&D' is more about seeking influence from upstream in the supply chain, rather than actually starting their own factory and screwing in the screw.

This game is not a zero-sum game, but a reshaping of division of labor.

| Automakers' calculations: I may not necessarily make battery cells, but I need to understand the formula

Automakers are now all racing to do one thing: opening the "black box" of batteries.

In the past, car companies bought batteries like buying a phone—they only knew how good it worked, not how they were built. Now, Li Auto, XPeng, and Leapmotor are all delving into material formulations, cell structures, and manufacturing data.

XPeng: Not making battery cells, only battery pack structures and management systems (BMS), and buying cells externally.

Ideal: Develop its own cell formula, but rely on Sunwoda and CALB for contract manufacturing.

Leapmotor: Even built a joint venture factory to manufacture its own battery cells, focusing on cost reduction (claiming to save 10%).

The core motivation behind automakers doing this is simple: the more knowledgeable they are, the easier they can negotiate. Once I know your material costs and process challenges, I can break down the quotes and judge which performance is necessary and which are negotiable. It's like renovation: if you don't know the trade, you'll be led by the foreman, and only with expertise can you precisely control your budget.

| CATL's Trump Card: Economies of Scale and "Manufacturing Barriers"

If automakers want to bargain, does CATL have no other choice? On the contrary, CATL's moat is deeper than imagined.

Scale dilution costs: CATL's semi-annual report shows a capacity utilization rate as high as 94.86%. The more fully loaded the production line, the lower the depreciation and fixed costs allocated to each cell. This is something second-tier manufacturers find hard to match.

Manufacturing consistency: It's easy to make a good cell, but hard to make a hundred million identical cells. Zeng Yuqun's emphasis on "consistency" is the ultimate threshold for mass production.

Data Closed-loop: CATL possesses massive real-vehicle data (including vehicles over 8 years old), combining electrochemical mechanisms to more precisely optimize BMS strategies. This is something automakers find difficult to accumulate in the short term through self-developed development.

For the same lithium iron phosphate battery cell, CATL's material and manufacturing costs are lower than those of second-tier companies. This means that even if automakers cut prices, CATL still has profit margins, while competitors may already be bleeding.

Kingtech Perspective | Reshaping division of labor benefits leading companies and new technologies

Automakers developing their own batteries essentially means separating "design" from "manufacturing." Automakers hold the right to define, while battery manufacturers control manufacturing.

For CATL: Although some models may lose market share, the overall industry is rising (global market share has risen to 39.9%), and energy storage and overseas markets (higher gross margins) provide a second growth curve. In-house R&D may actually create OEM opportunities.

Focus on leading battery companies with global capacity layout, technological iteration (such as fast charging, solid-state), and cost control capabilities. The banner of "self-development" by automakers actually validates the strategic value of the battery segment.