Net profit increases by 42%, decoding CATL's long-term growth engine under the "full-domain incremental" strategy

(Source: Scale Business)

In business history, truly enduring industry leaders are often long-term thinkers.

On March 9, CATL disclosed its 2025 annual financial report, achieving an operating revenue of 423.702 billion yuan, a year-on-year increase of 17.04%; net profit attributable to shareholders of the parent company reached 72.201 billion yuan, up 42.08%, continuing to lead in profitability. The full-year net cash flow from operating activities was 133.2 billion yuan, and at the end of the year, total cash and trading financial assets reached 392.5 billion yuan, further strengthening its financial safety cushion.

This impressive performance demonstrates CATL’s steady and robust development, revealing the secret behind its growth: shifting from “partial breakthroughs” to “all-encompassing incremental growth,” unleashing growth momentum.

With power batteries and energy storage as its core, CATL continues to solidify its fundamental moat, building a foundation for growth. Meanwhile, with a strategic vision of “all-encompassing incremental growth,” it expands business scenarios, accelerates unlocking new fully electric applications, and constructs an ecological closed loop under the new energy system—transforming from a scale-based moat to a “quality-based” moat.

What enables CATL’s “all-encompassing incremental growth” to achieve strong expansion? The answer lies in the “long-term growth engine” driven by a combination of “technology + zero-carbon” strategies.

By 2025, CATL will invest 22.1 billion yuan in R&D and technological innovation. Over the past decade, cumulative R&D investment has exceeded 90 billion yuan, providing a solid foundation for continuous core technology innovation. With leading technological capabilities, CATL keeps breaking through in products, services, scenarios, and ecosystems, ensuring it remains a technology-driven company.

Based on technological innovation, CATL accelerates its zero-carbon strategic deployment, promoting zero-carbon technologies and zero-carbon power businesses. It continuously improves the zero-carbon economy’s innovation chain, industrial chain, and value chain—shaping its green zero-carbon development while also advancing upstream and downstream zero-carbon progress in the industry chain. This not only fulfills social responsibilities but also builds its business barriers.

CATL Chairman Zeng Yuqun said that the new energy industry is at a new crossroads, moving from high-speed growth to high-quality development, from partial breakthroughs to all-encompassing incremental growth, ushering in a broader and more systematic era of growth.

From this financial report, we see that CATL does not greedily pursue “short-term performance,” but instead creates long-term value through technological innovation and a zero-carbon closed loop in the new energy cycle.

High-quality growth through “all-encompassing incremental growth”

In recent years, “high-quality growth” has become a consensus across industries. The market’s evaluation of a company has shifted from focusing on short-term explosive performance to whether there are sustainable growth drivers behind it. By 2025, CATL exemplifies “high-quality growth.”

In 2025, CATL’s revenue is projected to grow 17% year-over-year, with net profit attributable to shareholders reaching 72.2 billion yuan, up 42%. Based on net profit, this global lithium battery giant’s daily net profit in 2025 approaches 200 million yuan. Some in the market call this figure “terrifying.”

This performance not only highlights CATL’s “terrifying” profitability but also reveals a path of high-quality development behind that profitability: shifting from “partial growth” to “all-encompassing incremental breakthroughs,” releasing sustained growth momentum.

Power and energy storage are the foundation of CATL’s core business, forming its basic moat. In power batteries, driven by factors such as increasing models on sale, accelerated intelligence, and continuous improvement of charging infrastructure, demand continues to grow.

SNE Research data shows that in 2025, global new energy vehicle sales will reach 21.47 million units, a 21.5% increase year-over-year, with global power battery usage reaching 1,187 GWh, up 31.7%.

As a global leader in power batteries, CATL benefits from this trend, consolidating its market position. According to SNE Research, the company’s global market share in power battery usage increased by 1.2 percentage points to 39.2%, ranking first for nine consecutive years, with overseas market share rising to 30%.

Financially, in 2025, CATL’s annual lithium battery sales reached 661 GWh, up 39%; revenue from power battery systems hit 316.506 billion yuan, an increase of 25.08%.

In energy storage, CATL’s business is steadily growing. In 2025, energy storage battery sales reached 121 GWh, up 29.13%, with a global market share of 30.4%. It has maintained the top position worldwide for five consecutive years (2021-2025), and its energy storage system integration shipments increased by over 160% year-over-year.

The financial report shows that energy storage business revenue reached 62.44 billion yuan, up 8.99%. More importantly, the gross margin of energy storage batteries reached 26.71%, nearly 3 percentage points higher than power batteries.

The dual drive of power and energy storage solidifies CATL’s foundational moat. With this solid base, CATL confidently pursues “all-encompassing incremental growth” strategies—through “up to the sky, down to the ground, into the sea, and swapping batteries”—pushing the boundaries of electrification and unlocking new scenarios for full electrification.

In summary, CATL’s “all-encompassing incremental growth” means not just being the power core of vehicles, but extending its reach to all scenarios related to electricity.

For example, low-altitude economy has become a hot track in recent years. CATL’s subsidiary Fengfei Aviation’s 2-ton eVTOL has completed multiple complex environment flight tests, and the world’s largest 5-ton eVTOL has completed its first public flight.

Aviation-grade safety standards far exceed those for vehicles. The successful flight of the ton-class eVTOL indicates that CATL has obtained the qualification to enter the aerospace supply chain, not just installing batteries into aircraft.

In water, CATL’s marine batteries have received type approval from the world’s five major classification societies, supporting nearly a thousand electric ships, and launching the “Ship-Shore-Cloud” zero-carbon solution—entering the shipping energy management system from battery sales.

On land, in the new energy heavy-duty truck sector, CATL’s “Tianxing” batteries have become mainstream choices. Its “battery swapping” ecosystem is also taking shape: over 1,000 swapping stations for passenger cars across 45 cities, and more than 300 for commercial vehicles across 26 provinces, providing over 1.15 million swapping services annually.

This “vehicle-battery separation” model not only reduces users’ vehicle purchase costs but also tightly binds users within CATL’s energy service system.

Currently, the industry consensus is that future competition will hinge on “who can match the most suitable chemical system to the most suitable scenario.” Looking at CATL’s “all-encompassing incremental” strategy, the company is transforming from a “battery supplier” into an “energy solution provider.” The breakthrough in “all-encompassing incremental growth” is becoming its next growth engine.

Technology + Zero-Carbon: Connecting the Long-Term Growth Engine

CATL Chairman Zeng Yuqun has said that CATL’s “all-encompassing incremental” breakthrough involves four innovative dimensions: technological iteration, scenario breaking, model innovation, and ecological reconstruction.

If “scenario breaking and model innovation” are becoming the growth drivers for CATL’s entry into the “all-encompassing incremental” era, then “technological iteration and ecological reconstruction” are the crucial supports behind. CATL links the “long-term growth engine” of the “all-encompassing incremental” era through “technological innovation + zero-carbon ecology.”

Manufacturing always depends on technology. CATL’s strong R&D capabilities are key to maintaining its global leadership.

In 2025, R&D investment will reach 22.1 billion yuan, up 19.02%, accounting for 5.23% of revenue—a continuous increase from previous years. Over the past decade, cumulative R&D spending has exceeded 90 billion yuan, laying a solid foundation for technological breakthroughs.

Beyond sustained high R&D investment, CATL has established six global R&D centers and employs about 23,000 R&D personnel to ensure innovation efficiency. These investments directly translate into technological barriers: by the end of 2025, CATL held or was applying for a total of 54,538 patents domestically and internationally, ranking second among Chinese companies in international patent applications.

Supported by technological innovation, CATL’s innovative products are continuously deployed. In power batteries, new products such as the second-generation Shenxing ultra-fast charging batteries, Shenxing Pro batteries, and Xiaoyao dual-core batteries address range anxiety and charging issues, while new sodium-based passenger vehicle batteries expand the product portfolio.

In energy storage, the commercialization of 587Ah large cells and improvements in safety, energy density, and lifespan further demonstrate that core competitiveness lies in technological strength.

Notably, CATL’s technological innovation is no longer limited to products but extends to scenarios and ecosystems. With a “full-encompassing incremental” approach, it broadens its technological reach, building genuine technological barriers.

In aerospace, CATL has obtained AS9100D aerospace quality system certification and supplies batteries for eVTOL; in shipping, its marine batteries have received type approval from the five major classification societies worldwide.

Meanwhile, CATL integrates technology into every aspect of its operations, owning the industry’s largest “Lighthouse Factory” and the only “Sustainable Lighthouse Factory,” achieving large-scale delivery while maintaining defect rates far below industry averages.

In summary, CATL combines deep core technology development with scenario expansion and sustainable growth, forming a development model with strong competitive advantages.

In its 2025 annual report, CATL redefined itself as a “world-leading zero-carbon new energy technology company,” emphasizing the improvement of industrial ecology and extending the value chain—building a zero-carbon ecosystem that goes beyond ESG to a commercial level, creating business barriers through zero-carbon ecology.

It is also strengthening cooperation with local governments, establishing integrated wind, solar, and storage zero-carbon industrial parks in Yibin (Sichuan), Hainan, Fujian, Shandong, and other regions, achieving 100% green electricity direct connection. The Donying project in Shandong is the world’s first zero-carbon industrial park with high proportions of green power direct supply.

More importantly, CATL not only aims for zero-carbon operations itself but also packages its zero-carbon technologies to empower other enterprises, jointly achieving zero-carbon production and construction. The annual report mentions collaborations with Sinopec, Conch Group, Liaoning Fanda Group, and Cind Steel to promote integrated source-grid-load-storage solutions, expand zero-carbon scenarios, and explore pathways for decarbonizing high-emission industries.

Overall, CATL’s “technology + zero-carbon” strategy ensures its dominant position in the “all-encompassing incremental” era, allowing it to capture the largest share of the new energy industry’s upgrade. As global energy transition becomes irreversible, zero-carbon policies, customer demands, and capital flows all favor this direction. CATL’s zero-carbon ecosystem layout effectively locks in future compliance and competitiveness, strengthening its core advantages for the long term.

Currently, the global new energy industry is booming. Only by adhering to long-termism can sustainable industry compounding be achieved and global respect earned. With “all-encompassing incremental growth” as a breakthrough, CATL is completing its high-quality transformation and providing a replicable, scalable “Chinese solution” for the global energy transition.