- CATL bought an equity stake in Chongqing Yaoning, a Geely-linked battery plant, signaling a strategic shift to secure local capacity amid intensifying supplier competition and margin pressure.
- The plant targets 30 GWh long-term capacity with an 18 GWh first phase under construction, trial production slated December 2026 and full production in Q1 2027, RMB 10 billion annual output value.
- Direct competitors include automaker in-house battery programs and second-source suppliers, while execution risks include timing of ramp, changing demand, integration of assets and capital intensity.
The latest roster of concluded merger‑control cases includes CATL’s purchase of an equity stake in Chongqing Yaoning New Energy Technology Co., Ltd., as recently released by the State Administration for Market Regulation (SAMR).
The transaction involves CATL and Zeekr Automobile (Shanghai) Co., Ltd. Following its review, the regulator approved the deal without conditions.
The approval means the transaction has cleared the antitrust review and can now proceed under the agreed terms.
Chongqing Yaoning was formerly known as Chihang New Energy. It was established in 2021 as a joint venture between Geely Technology Group and Farasis Energy.
After Farasis Energy exited the venture, the plant was brought under Geely’s control and renamed Chongqing Yaoning.
The Chongqing Yaoning New Energy plant has a long-term planned annual capacity of 30 GWh covering the R&D and production of battery cells, modules and packs.
So far, only the 18 GWh first phase has received regulatory approval and is under construction.
Under the original plan, the plant is scheduled to begin trial production in December 2026 and enter full production in the first quarter of 2027.
Once fully ramped up, it is expected to generate annual output value of about RMB 10 billion ($1.49 billion).
Automakers and battery manufacturers have expanded capacity aggressively in recent years, but as supply-demand conditions change, the risks associated with adding more capital-intensive capacity are rising.
For battery makers that already have significant scale, integrating existing or under-construction capacity can offer greater control over investment timing than building new plants from scratch.
CATL remains the dominant player in China’s power battery market. From January through August 2026, its share of domestic power battery installations reached 44.7%, up 2 percentage points from a year earlier.
At the same time, automakers are seeking to reduce reliance on individual battery suppliers by developing batteries in-house and adding second-source suppliers.
On September 4, Xiaomi Auto reached a strategic cooperation agreement with CALB and Sunwoda Power on the development of its “Xiaomi Longjia Battery.”
On September 7, Li Auto unveiled its latest battery strategy, saying in-house-developed batteries would gradually be deployed across its lineup starting in the second half of this year.
Automakers that previously relied heavily on suppliers including CATL are actively diversifying their battery sources.
Against this backdrop, CATL’s acquisition of battery assets within an automaker’s ecosystem can be seen as one way to respond to changes in the supply chain.
Rather than simply competing for battery orders, gaining direct access to production capacity allows CATL to establish local supply near customers while further anchoring supply relationships through equity ties.
Geely’s move does not represent a complete exit from battery manufacturing.
In early 2025, the automaker consolidated its battery assets under Geely’s Jiyao Tongxing unit and began developing its unified Aegis Short Blade battery system.
Rather than continuing to add large amounts of capital-intensive capacity, the sale of some assets under construction is more consistent with a reallocation of resources within Geely’s battery business.
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