CATL's Australian Storage Win and Solid-State Timeline Run Into the Same Wall: Earnings Lag Revenue

CATL has secured selection as battery supplier to Birdwood Energy's Baranduda project near Wodonga, a 400 MW/1.86 GWh storage development that gives the Chinese group a concrete foothold in Australia. The company has already installed more than 17 GWh of storage capacity in the country, so the expansion starts from a real base rather than a blank slate. The same day, CATL unveiled TENER+ in Melbourne — a product launch that signals ambition but, unlike the Birdwood selection, does not yet represent a binding order.

That distinction sits at the heart of the investment case. Regional chief Zane Zhou is working to convert Australian interest in sodium-ion storage into actual projects, and until that interest hardens into contracts, the growth story rests on intent rather than commitments. Bloomberg reported his efforts.

A profit gap that keeps widening

The numbers behind the expansion are what make the Australian push strategically important — and what make it hard to read. Revenue climbed 58.58%, while net profit rose just 14.54%, according to media reports. For the third quarter of 2026, a gross margin of 20.69% was cited. MarketWatch framed the international expansion against investor concerns over whether CATL can defend its industry-leading margins.

That concern is not abstract. A high order intake without a credible margin outlook would answer only part of the question investors are asking. New contracts would carry real weight if they simultaneously supported profitability; volume alone will not settle the debate.

Should investors sell immediately? Or is it worth buying CATL?

Cost advantages as the sales pitch

The bull case rests on tangible customer economics. TENER+ offers 9 MWh of storage capacity and, according to CATL, requires 40% fewer containers than conventional solutions — a smaller footprint that could simplify project planning. TENER Sodium, meanwhile, provides more than 30 MWh per modular configuration, with planning, procurement and construction costs claimed to run more than 10% below those of containerized LFP systems.

CATL paired the launch with new partnerships, signing letters of intent with Hitachi Energy, EPEC Group and UNSW Sydney. Together with Hitachi Energy, the company intends to combine batteries and power-conversion technology into an integrated offering for Australia and the Asia-Pacific region. That could ease access to projects, though it is not an additional offtake agreement. Bloomberg reported that CATL has already closed sodium-storage supply deals in China and Europe, making Australian contracts the next step in commercializing the technology internationally.

Interest is not the same as demand

The bear case starts with execution. Zhou has stressed that Australian interest in sodium storage still has to be translated into projects, and letters of intent offer less certainty than firm supply contracts. Bloomberg described the sodium technology as less temperature-sensitive but also less energy-dense, and therefore bulkier.

TENER+ faces its own lag. CATL considers an Australian market launch possible in 1–1.5 years, while grid-connection reviews and project financing are likely to take more than a year in the country, according to Zhou. A lengthy stretch could separate product announcement from economic contribution — a problem if pressure at home persists. Bloomberg cited weaker domestic demand, particularly for electric vehicles, plus a renewed consumption tax on battery cells weighing on orders and profitability. The risk is therefore not only slow Australian deals; new overseas business could also arrive too late to offset strains in the home market.

Solid-state and battery swapping add a second front

Beyond storage, CATL reaffirmed its expectation to begin small-series production of solid-state batteries in 2027. The sulfide-based cells have reached testing with 20 Ah samples, and the company targets an energy density of roughly 500 Wh/kg. That is a development milestone and a target, not a completed step toward small-series output — a date anchor rather than proof of commercial breakthrough.

Cooperation agreements could broaden the technology story. On 22 October, CATL and BAIC Group signed a deal to expand their battery-swap partnership, aiming to support one million vehicles. BAIC is to bring compatible models into the Choco-Swap network and open its dealer network to station build-out. The agreement links vehicle models with access to sites; the vehicle figure remains a target and should not be confused with achieved usage. Separately, CATL presented a dual-battery range-extension system with a battery-swap offering for heavy trucks alongside QIJI Energy on 20 October, with agreements covering 13,000 units signed at the launch.

What the analysts are saying

Morgan Stanley provides the cautionary counterweight. The bank kept its "Overweight" rating on CATL's A-shares but lowered its price targets — a distinction that matters: the move was not a blanket retreat from the company, and it implies neither failure of the solid-state program nor a guaranteed recovery. The action does, however, underline a more circumspect valuation.

CATL at a turning point? This analysis reveals what investors need to know now.

The latest quarterly figures, published on 20 October, showed vigorous business expansion that nonetheless fell short of market expectations. Strong revenue growth does not guarantee comparable profit growth, and if that pattern persists, even confirmed development targets and additional partnerships may not justify higher expectations.

The proving ground ahead

For a constructive scenario to hold, CATL must show that growing business translates into stronger profit. Technical progress can support that expectation but cannot replace evidence of improved earnings. Conversely, slower profit growth would not automatically disprove technological advances — it would, however, weigh on how they are valued.

The next explicit milestones are the small-series solid-state production expected in 2027 and the global sodium-storage deliveries planned for June 2027, which could show whether CATL meets its stated transition to supply. Until then, investors are weighing a demonstrated storage business against expectations still to be redeemed. Baranduda offers a concrete starting point; further contracts and actual deliveries must confirm whether it becomes a broader, profitable expansion.

Ad

CATL Stock: New Analysis - 28 October

Fresh CATL information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated CATL analysis...