Shares of the largest supplier of electric vehicle batteries soared after the company announced a buyback

Shares of the world’s largest manufacturer of electric vehicle batteries—China’s Contemporary Amperex Technology (CATL)—rose in China after the company announced a share buyback program following strong financial results for the first half of 2026, according to Bloomberg.

During trading in Shenzhen, CATL’s stock price rose 5.4% to 403.8 yuan, marking its largest intraday gain in more than a month, before pulling back slightly. The company’s shares in Hong Kong rose 2%.

On July 24, CATL, citing confidence in its growth prospects, announced that it plans to repurchase Class A shares worth between 20 billion and 40 billion yuan (between $3 billion and $5.9 billion). Under the terms of the program, CATL will buy back its own shares from the market at a price not exceeding 573 yuan per share, after which all repurchased shares will be canceled. The battery manufacturer attributed the decision to conduct the buyback to the need to “prevent a potential decline in share prices and a gap between market valuation and the actual value of the shares due to volatility.” Since the beginning of the year, CATL’s shares have risen 8.9%, although they have fallen 14.7% from their May high of 468.7 yuan.

The company also reported a 42% increase in profit for the first half of 2026 compared to the same period last year. CATL’s revenue for the same period rose by 55%. The energy storage systems segment made the most significant contribution to the company’s financial results.

CATL stated that the company’s long-term profitability remains relatively stable despite short-term market fluctuations, including spikes in raw material prices. The manufacturer has stepped up its efforts to commercialize sodium-ion battery technology, which does not require the use of lithium. The company unveiled this technology in June and said it expects to equip at least 10,000 electric vehicles with its sodium-ion batteries as early as this year.

“Sodium-ion batteries will have a certain price advantage when produced on a large scale,” given the current high prices of lithium carbonate, Bloomberg quoted CATL as saying. “Customers are showing a high level of interest” in this technology, the company added, noting that its existing production lines allow it to “flexibly switch” between the production of lithium-ion and sodium-ion batteries.

"We view the share buyback program positively from the perspective of market sentiment, as it increases returns for the company's shareholders," Nomura analysts wrote. Their opinion was reported by Dow Jones Newswires.

Bernstein analysts noted that a key weakness in the company’s report was the decline in gross margin to 23.9% year-over-year, reflecting rising metal prices. Nevertheless, the company’s core margin remains stable—at around $15 per kilowatt-hour—confirming the company’s sustained profitability despite rising costs, according to MarketWatch.

Bernstein expects CATL’s revenue to grow by 20–30% annually through 2030. Only a few players in this sector are capable of offering a comparable combination of growth rates and business scale, the analysts added.

Overall, analysts view the company's stock outlook positively: 28 out of 29 experts who track CATL shares recommend buying them. Only one advises selling.

In recent months, against the backdrop of the war in the Middle East and surging global oil prices, interest in electric vehicles has returned. In March, for example, China’s electric vehicle exports reached a record high due to the threat of an energy crisis. And one of the beneficiaries of the global rise in oil prices turned out to be the Chinese electric vehicle manufacturer BYD, according to Bloomberg, — the company’s overseas sales in just the first two months of the year—January and February—rose by 50% compared with the same period last year.

This article was AI-translated and verified by a human editor