EV Makers Accelerate Diversification of Battery Suppliers to Mitigate Cost and Supply Risks

Recently, several new energy vehicle (NEV) manufacturers have adjusted their traction battery procurement strategies, gradually introducing second-tier battery makers as secondary and tertiary suppliers. According to the Ministry of Industry and Information Technology’s (MIIT) new vehicle registration data, the Aito M6 EV has adopted battery cells from Gotion High-Tech, marking Harmony Intelligent Mobility Alliance’s (HIMA) first mass-produced vehicle equipped with batteries from a second-tier supplier. Meanwhile, Li Auto’s updated L8 model has switched to Sunwoda battery cells, and brands such as Xiaomi, Leapmotor, and GAC Aion are also expanding their lists of diversified battery suppliers. Traction batteries account for 30% to 40% of a vehicle’s total material costs. With lithium carbonate prices surging by over 160% this year, automakers’ profit margins have come under further pressure. Data shows that CATL earns RMB 230 million in net profit per day, while the average profit margin across the entire automotive manufacturing sector stands at just 3.4%. In Q1, CATL held nearly 50% of China’s traction battery market share, reflecting high industry concentration. This heavy reliance on a single supplier creates risks of imbalanced bargaining power and potential supply disruptions. To reduce procurement costs, alleviate capacity constraints, and secure supply chain resilience, automakers are actively building multi-supplier systems. As second-tier battery manufacturers continue to enhance their technological capabilities and production quality, their products now meet the requirements for mass-market adoption. Automakers emphasize that regardless of which cell supplier is used, all batteries will be subject to uniform technical standards and quality control systems to ensure an uncompromised user experience.