How Chinese EV Makers Choose Battery Suppliers
Battery sourcing has become an increasingly important issue for China’s electric vehicle industry. The key question is not simply which battery maker an automaker uses, but how it allocates battery orders across suppliers.
August installation data from major EV makers and battery companies shows two distinct patterns: automakers often rely heavily on one supplier while keeping additional sources, while smaller battery makers can be highly dependent on a small number of automakers.
How do major EV makers source batteries?
Tesla, Xiaomi, Nio, XPeng, Li Auto and Leapmotor all use different supplier structures.
Tesla China mainly sources batteries from CATL and LG. In August, Tesla used about 2,136 MWh from CATL, making it one of CATL’s five largest customers, while LG supplied about 1.6 GWh in China.
Xiaomi and Nio both rely heavily on CATL while maintaining a secondary supplier. Xiaomi used about 2,105 MWh from CATL and 423 MWh from FinDreams Battery, putting CATL at roughly 83% of its battery volume. Nio used about 1,981 MWh from CATL and 250 MWh from Sunwoda, giving CATL an estimated 89% share.
XPeng’s estimated August battery use in China was about 1.91 GWh. CALB supplied around 1,250 MWh, or 79%, while EVE Energy contributed 332 MWh and FinDreams Battery was estimated at about 300 MWh.
Li Auto’s battery volume was estimated at about 2.48 GWh, with CATL supplying roughly 1.44 GWh and Sunwoda about 1,049 MWh. Li Auto was therefore a major customer for Sunwoda, although its volume was relatively small within CATL’s much larger customer base.
Leapmotor had the most diversified structure among the group. Its visible August battery volume totaled about 3,359 MWh, supplied by Gotion High-Tech, REPT, EVE Energy, CALB and SVOLT. Gotion was the largest supplier at about 1,618 MWh, but represented only around 48% of visible volume.
The takeaway is that “multi-sourcing” does not necessarily mean balanced sourcing. The real issue is how much volume each supplier receives.
What does the customer structure of battery makers look like?
CATL illustrates the advantage of scale.
Its estimated August battery installations in China reached about 30,955 MWh. Geely was the largest customer at 2,972 MWh, or 9.6%, followed by Changan at 8.0%, Tesla China at 6.9%, Xiaomi at 6.8% and Nio at 6.4%.
The top five customers accounted for about 37.7% of CATL’s total volume.
This means a 2.1 GWh customer such as Xiaomi can be strategically significant to a smaller battery company, while representing less than 7% of CATL’s monthly installations.
Why does customer concentration matter?
For smaller battery makers, dependence on individual customers can be much higher.
CALB installed about 4,511 MWh in August. XPeng was its largest customer at 1,250 MWh, or 27.7%. Its top five customers accounted for 61.4%.
Gotion High-Tech recorded about 4,458 MWh. Leapmotor contributed 1,618 MWh, or 36.3%, while Chery accounted for 18.3% and SAIC-GM-Wuling 11.2%. The top five represented 78.5%.
EVE Energy installed about 3,389 MWh. Its largest customers included Leapmotor at 14.9%, Foton at 13.5%, XPeng at 9.8%, Sany at 9.5% and FAW Jiefang at 7.9%. The top five accounted for 55.6%.
Sunwoda installed about 2,691 MWh, with Li Auto accounting for 1,049 MWh, or 39.0%. SAIC-GM-Wuling contributed 20.4% and Nio 9.3%. Its top five customers represented 78.2%.
Concentration becomes even stronger at some smaller suppliers.
REPT’s top five customers accounted for 86.4% of its 2,289 MWh August volume. Jiyao Tongxing received about 97.5%of its 1,980 MWh volume from Geely. SVOLT’s 1,714 MWh total included about 75.5% from Great Wall. For REPT, SVOLT and Jiyao Tongxing, a small number of customers therefore determine most monthly volume.
What does this tell us about China’s battery market?
The data points to a two-level market structure.
Large battery companies such as CATL can spread demand across multiple automakers. Their scale means even very large orders from individual EV makers may represent only a modest share of total business.
Smaller suppliers often have much more concentrated customer bases. A major automaker can account for a substantial share of monthly installations, making the supplier more sensitive to changes in that customer’s production, model mix or procurement strategy.
For automakers, the key variable is supplier allocation. For battery makers, it is customer concentration.
What should be watched next?
Three variables will remain central: vehicle production, battery capacity and supplier allocation.
Vehicle production determines battery demand. Supplier capacity determines who can meet that demand. Allocation determines how the business is divided across battery makers.
For this reason, monthly installation rankings alone do not fully explain the competitive landscape.
A better way to understand China’s EV battery industry is to examine the relationship from both sides: which automakers buy from which battery suppliers, and how dependent each supplier is on its largest customers.
Data note: Figures are based on the August estimates provided in the source material. Some Li Auto and XPeng figures were estimated from retail-sales data. Percentages may vary slightly due to rounding.
Related Coverage:
Why Does Battery Giant CATL Make More Money Than China’s Automakers?