CITIC Securities: Chinese Battery Makers Maintain Global Edge as Japanese and Korean Rivals Face Profit Pressure

A research report from CITIC Securities noted that due to the elimination of North American EV subsidies and high operating costs associated with energy storage production lines, four overseas battery makers—LG Energy Solution (LGES), Samsung SDI, SK Innovation (SKI), and Panasonic—experienced a significant sequential decline in overall profitability in Q4 2025, with all except Panasonic falling into losses. Although their energy storage businesses drove revenue growth, profit margins came under clear pressure. Looking ahead to 2026, Japanese and Korean battery manufacturers are expected to face intensified competition from Chinese rivals in the EV battery market, potentially leading to further market share erosion; the pace of product validation, capacity ramp-up, and order fulfillment remains to be closely monitored. The report maintains that Chinese battery companies will continue to hold a strong competitive edge globally in both EV and energy storage sectors, and recommends leading domestic firms that demonstrate notable advantages in overseas market share expansion, profitability, and valuation.