The "tug of war" between vehicle manufacturers and power battery companies has never stopped around the "heart" of new energy vehicles, the power battery. Recently, with vehicle companies such as Ideal, Xiaomi, Zero Run, and Xiaopeng further shouting the slogan of "self-developed batteries", the industry's discussion on the development direction of power batteries has once again been ignited.

These newly entered power battery car companies have not ventured into the core link of battery cell manufacturing, but have only established joint ventures with battery companies to build battery cell production lines. Therefore, many opinions believe that the current car companies' "self-developed batteries" are just a marketing gimmick that does not touch the core. However, vehicle manufacturers argue that "self-developed batteries" do not necessarily mean that they must produce their own battery cells.

Vehicle companies are enthusiastic about "self-developed batteries", and the fundamental reason lies in the extremely high weight of the power battery industry chain. Its procurement cost can usually reach 30% -40% of the vehicle cost, making it an indisputable core high-value component. Meanwhile, the stability of power battery supply is crucial for automotive companies. In addition, when a battery safety accident occurs, how to dispose of the responsibility of the battery has also prompted car companies to increasingly lean towards independent control of the battery.

What car companies need to 'self research' is not the entire process from ore to battery cells, but the right to define batteries, system integration, quality assurance, and data iteration. The touchstone of self research is not whether they can build their own battery cell factory, but whether they can clarify the design logic, assume quality responsibility, and enable each batch of data to feed back to the next generation of products, "said Dong Peng, a senior enterprise management expert and senior consultant, to the Economic Observer.

Difficult battery cell self-developed

If the only criterion for self-developed batteries is whether they produce their own battery cells and supply them in large quantities, then currently only BYD is able to meet the standard. The starting point for BYD's entry into the new energy vehicle industry is batteries, and most of its Freddie batteries are currently supplied to BYD's own new energy vehicles. BYD "had batteries first, then new energy vehicles" and has been in operation since the 1990s, while other vehicle manufacturers are not like this.

The full chain technology from lithium ore processing, positive and negative electrode materials, separator electrolyte to battery cell development, battery pack production and recycling has long been in the hands of power battery enterprises. Ningde Times, Zhongchuang Chuanghang, Yiwei Lithium Energy, Guoxuan High tech, Xinwangda and other power battery enterprises have all ushered in development opportunities due to the "Ten Cities, Thousand Vehicles Energy saving and New Energy Vehicle Demonstration and Promotion Application Project" launched in 2009, and have begun to specialize in the production of new energy vehicle power batteries. At that time and for a considerable period of time thereafter, the main focus of vehicle manufacturers was on vehicle research and development, and the importance of power batteries was not given enough attention by vehicle manufacturers from the beginning.

With the expansion of the production and sales scale of new energy vehicles, the importance of power batteries has become increasingly prominent, leading to the gradual initiation of battery research and development by vehicle manufacturers. Early vehicle manufacturers started their own battery research by developing battery cells.

Guangqi New Energy (main brands are Ai'an and Haobo) is an early developed new energy vehicle enterprise in China. Since 2017, it has been conducting independent research and development of battery cells and building test lines. At present, Yinpai Battery, a subsidiary of GAC Group, is responsible for self-developed and self-produced batteries, forming a full stack self-developed asset from materials, cells to PACK. According to public information, the total investment of the Yinpai project is 10.9 billion yuan, with a planned total production capacity of over 60GWh. Currently, 18GWh has been built. As of October 2026, more than 300000 sets of Yinpai batteries have been offline. However, judging from the production and sales scale of GAC Aion, in addition to self-developed supply, a large part of its power battery supply also relies on third-party manufacturers.

NIO is another company that independently researches battery cells. Starting from 2021, in order to adapt to its charging and swapping system, NIO proposed to develop and manufacture its own battery cells. Initially, it planned to build a battery factory with an annual production capacity of 100 GWh, and set an internal goal of launching self-developed battery cells in 2024. However, due to fluctuations in business conditions, the plan has been stalled since then. Currently, NIO has shifted its self-developed battery model to independent design and third-party outsourcing, with EVE Energy and Guoxuan High Tech as the outsourcing partners. However, its battery cells still do not have the conditions for large-scale production. Similar to other vehicle manufacturers, NIO currently relies mainly on other power battery manufacturers to supply its battery cells.

In addition, vehicle manufacturers such as Geely and BAIC also have certain capabilities in self-developed and self manufactured battery cells, as well as supply capabilities, but they also heavily rely on external battery cell supply. In the entire new energy vehicle industry, BYD remains the only complete vehicle enterprise that has achieved self-made battery cells and large-scale production supply.

The high technical difficulty and high capital investment of self-developed battery cells have become the core reasons why the vast majority of vehicle manufacturers have not conducted in-depth layout. Moko, founder and president of the True Lithium Research Institute, believes that the production of battery cells involves extremely high requirements for process consistency and stability, which are difficult for non professional car companies to handle.

In addition, with the rapid expansion of battery production capacity and the trend of "internal competition" in the industry, policies have imposed strong constraints on battery production. According to the Economic Observer, starting from the second half of 2026, relevant departments will conduct a systematic capacity survey of the power and energy storage battery industry. Various regions will basically stop accepting new capacity registrations for power and energy storage batteries, and new applications will be suspended. Existing and under construction projects will not be affected.

The road to building new battery cell production capacity is basically blocked, which means that vehicle manufacturers no longer have the qualifications to independently develop and manufacture battery cells. In fact, based on the current industry situation, there is no need for vehicle manufacturers to independently develop battery cells, "said a person in charge of a domestic power battery company to the Economic Observer.

New self-developed model

Since June this year, companies such as Ideal Auto, Xiaomi Auto, Xiaopeng Motors, and Leapmotor have successively announced their entry into the ranks of self-developed batteries. These companies' self-developed and self-made products do not involve battery cells, but they all emphasize cooperation and co creation with power battery companies.

In October, Ideal Auto officially released its self-developed "Lianshan" electric technology system at "Power Day", with Lianshan batteries as the core component fully disclosed. Ideal Automobile stated to the Economic Observer: "Our battery pack adopts a self-developed and self-made mode, and our battery cells adopt a self-developed and OEM mode. In terms of battery cells, we have chosen to develop our own chemical system and design the cell structure, but the production process is entrusted to excellent domestic battery production enterprises. They have their own long-term accumulation in manufacturing management capabilities and process levels, which are abilities that we value very much. The two sides complement each other perfectly, which is more conducive to optimizing costs and efficiency

On the capital level, in September of this year, Ideal Automobile increased its capital to Xinwangda Power with 2.65 billion yuan, holding a total of about 11.17% of the shares, becoming the second largest shareholder and locking in the stability of the OEM relationship with capital ties.

The self-developed Xiaomi Longjia battery has similarities with the Ideal Lianshan battery, both of which do not produce their own battery cells. The difference is that Xiaomi is more proactive in intervening in battery cell manufacturing. In the Longjia battery system, Xiaomi Automobile is responsible for defining the electrochemical system, voltage platform, battery capacity, and cell specifications from the perspective of the entire vehicle; Lead the mechanical structure, electronic and electrical architecture, thermal management, and BMS software strategy of the battery pack; Deeply involved in the selection of battery cell materials, formulation design, and manufacturing processes; Implement full process control over supplier production lines through the "shadow factory" mechanism, extending control to first and second tier sub suppliers and raw material levels.

Zhongchuang Aviation and Xinwangda customized and developed electrochemical systems and materials based on Xiaomi's definition, and provided battery cell manufacturing capabilities. Both parties built exclusive production lines for Longjia batteries. Xiaomi Auto also invested 1.7 billion yuan in Xinwangda Power, forming a combination of "capital binding+customized production line".

Zero Run Motors only participates in the research and development of battery cells and places the manufacturing process in joint ventures with battery factories. On September 16th, Zero Run Technology Day, Zero Run Motors launched three standardized battery cells: L148, L208, and L300. The first battery cell production line of Zhongling New Energy, a joint venture with China Innovation Aviation, has been put into operation, using lithium iron phosphate and winding technology, with a production capacity of 500000 to 600000 vehicles. But Leapmotor is not walking on one leg, it also purchases battery cells from manufacturers such as CATL and EVE Power.

In contrast, Xiaopeng Motors' self-developed products are more like a marketing strategy. On September 17th, after the launch conference of Xiaopeng G9L, Xiaopeng Motors Chairman He Xiaopeng stated that "Xiaopeng Motors will start producing its own batteries this year", but also clarified that Xiaopeng Motors does not produce battery cells, and the cells will still be supplied by partners such as China Innovation Airlines, Xinwangda, and Honeycomb Energy. The scope led by Xiaopeng is the entire chain of battery pack design from bottom to mass production, focusing on Pack, BMS, thermal management, and structural design.

In fact, in addition to the above four companies, most mainstream vehicle companies are currently emphasizing self-developed batteries, and each has also released its own battery technology brand. The model of car companies developing their own batteries has shifted from the early stage of fully self-developed battery cells and battery packs to car companies mainly focusing on battery pack research and participating in battery cell development, but the production of battery cells is outsourced to power battery companies. The difference between each company is the depth of cooperation with power battery enterprises.

At the same time, it should be pointed out that for new types of batteries such as sodium batteries, solid-state batteries, and fast charging batteries, the development cooperation between vehicle manufacturers and power battery companies is more in-depth, because these technologies are still in the experimental or small-scale trial production stage, and vehicle manufacturers have more room for intervention.

The core of self research by car companies is to strengthen their understanding of battery technology, in order to more accurately propose performance requirements and calculate cost structures, so as not to be deceived in procurement. "Moko said that car companies should focus on battery pack technology, three electric system matching, and the definition and research and development of battery cell characteristics, and entrust battery cell manufacturing to professional battery factories.

Competition for battery definition rights

From the development history of the new energy vehicle industry, the impulse of car companies to independently develop batteries has always existed. The self-developed batteries of companies such as Ideal, Xiaomi, Zero Run, and Xiaopeng are just another wave in the long wave of self-developed batteries. This time, the self-developed battery model of car companies has changed, and their demands are not the same as before, but the driving force behind it remains unchanged: as the core component of new energy vehicles, power batteries continue to affect the profits, supply chain stability, and responsibility for safety accidents of car companies.

The two major battery safety accidents that occurred in the industry have made the issue of responsibility for battery safety public. One is that Geely based company Weirui Electric has sued battery cell supplier Xinwangda Power, citing quality defects such as inconsistent voltage platforms and significant internal resistance differences in the batteries delivered by the latter. Xinwangda emphasizes that the battery pack is a complex system integrated product, and the battery cell is only one part of it. Both sides hold their own opinions. In the end, both parties reached a settlement and Xinwangda compensated 608 million yuan.

Secondly, the Guangqi AiON S series models equipped with Zhongchuang Chuanghang 177Ah lithium iron phosphate batteries have collectively experienced battery pack bulging issues. At present, there is no clear attribution of responsibility for this incident. China Innovation Airlines stated to the Economic Observer that it will fully cooperate with car companies to do a good job in the next step of work.

The latest approach of the Ministry of Industry and Information Technology is to require vehicle manufacturers to strengthen their supply chain management. This is a responsibility formulation, which means that all problems are the responsibility of the vehicle manufacturers. Therefore, from the perspective of the vehicle manufacturers, it is indeed necessary to strengthen their understanding of batteries, "Moko told the Economic Observer.

Self developed batteries by car companies are an urgent pressure for rising costs and declining profits. On July 16th, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation issued Announcement No. 20 of 2026: Starting from September 1st, 2026, a consumption tax of 2% will be levied on lithium-ion batteries, lithium primary batteries, mercury free primary batteries, nickel hydrogen batteries, and all vanadium flow batteries; From September 1, 2027, the statutory tax rate will be restored to 4%.

Although the taxpayer is a battery production enterprise, consumption tax is an in price tax (tax included in the price of goods or services), which will be embedded in the factory price and transmitted along the supply chain. Affected by this, EVE Energy and Lishen Battery have issued price adjustment notices before the policy is implemented, and from September 1st, a 2% consumption tax cost will be directly added to the original non tax supply price. Most second tier, small and medium-sized battery companies negotiate one-on-one with car companies to share the burden.

Moko's judgment on this is that "under normal circumstances, the vehicle factory and the battery factory each bear roughly 1%", but leading battery companies "may not even be willing to bear 1%" for customers with small procurement volumes. At the 4% stage, it is more likely to form a tripartite sharing among battery factories, vehicle manufacturers, and consumers, but the proportion transmitted to the end is very small. In the face of current market competition, most car companies are likely to digest it on their own.

A battery industry insider said, "Nowadays, car manufacturers themselves are not making money, and once the two point consumption tax comes out, it is equivalent to an increase in costs." Car companies are dissatisfied with becoming "workers" and are putting pressure on top manufacturers by announcing their own research and development or introducing secondary suppliers in a high-profile manner. The self-developed statement aims to strive for a more equal negotiating position and force top battery manufacturers to make concessions in terms of price and benefits.

Dong Peng said, "The essence of self-developed batteries is that car companies compete for the right to define batteries after their sales cross the scale threshold. It is a shift from 'reducing single dependence' to 'controlling product pace'. From a macro perspective, batteries have high costs and fast technological iteration. Whoever sets the standards determines the overall vehicle experience. From this perspective, second tier battery factories have surplus production capacity and are willing to outsource, giving car companies a window to bypass strong suppliers. From a micro perspective, car companies need to connect safety, range, fast charging, and vehicle data to form their own iterative closed loop. Cost reduction is only the result, supply chain safety, bargaining power, and differentiation are the driving forces, and capital market narratives are also fueling it

An industry consensus is that more car companies will join the ranks of self-developed batteries in the future, but not everyone will independently develop the entire chain. Top tier car companies with stable sales are likely to gradually embark on the path of self-developed definition+OEM production. Self developed batteries have clear scale thresholds: research and development investment, production line debugging, and verification costs are all fixed expenses. Only when the sales volume of the vehicle model is large enough, can the cost be amortized and ultimately achieve more cost-effective results than outsourcing. For car companies with annual sales of hundreds of thousands of vehicles, the cost saved by self-developed batteries can fully cover the research and development investment. However, small and medium-sized car companies with limited sales volume will not rashly end up. For them, the investment in self-developed batteries is far less cost-effective than directly purchasing mature solutions. Forcing self-developed batteries will instead raise costs and amplify risks, "said marketing expert Chen Rongrong.

(Author Wang Shuaiguo)