Citi has released a research report stating that the market is focused on the "de-CATL-ization" trend driven by automakers diversifying their battery suppliers to strengthen cost discipline.

The bank believes this trend is indeed occurring, as second-tier battery makers are effectively expanding production capacity and improving quality to support downstream electric vehicle development and cost discipline.

CATL (03750) Chairman Zeng Yuqun also pointed out that automakers have accelerated their R&D and new model launch cycles, which the bank interprets as a negative factor for CATL, reflecting a weakening of its relationships with automakers.

However, the bank notes that CATL is focusing on expanding into EV markets outside China, with a market share of 45% in the first seven months of 2026, compared to 44% in FY2025, while also having a higher-end product mix.

The bank believes that CATL has been excessively shorted due to pessimistic sentiment, as demand growth is expected to remain in double digits and valuations are attractive.

The bank is also bullish on CALB (03931) and EVE Energy (300014.SZ), as both are rapidly expanding production capacity.