Li Auto Swaps CATL Cells for Its Own, Starting With the Li 6

Li Auto is replacing CATL-supplied battery cells with in-house developed cells across its line-up, and the Europe-bound Li 6 will carry the new technology, according to electrive.

Li Auto (ticker: LI) is pulling one of the most expensive parts of an electric vehicle in-house. The Chinese manufacturer is reducing its reliance on Contemporary Amperex Technology Co. Ltd., better known as CATL, and will increasingly fit battery cells it has developed itself. The Li 6, the model earmarked for Europe, is among the vehicles set to receive the new technology, electrive reported.

That is a short set of facts with a long tail. The battery pack is typically the single largest line item in the bill of materials for an electric car, which means the decision to design and source cells internally is not a procurement tweak. It is a decision about where Li Auto wants its gross margin to come from over the next product cycle, and about how much of its cost base it is willing to leave in someone else's hands.

Why carmakers stop buying cells and start building them

Buying cells from a specialist has obvious advantages. CATL is the largest battery maker in the world by volume, it carries the capital burden of cell plants, and it absorbs the learning curve on chemistry and manufacturing yield. The trade-off is that the supplier keeps the margin on the most valuable component in the vehicle, and the carmaker's cost curve is set by someone else's contract terms.

Bringing cell development in-house changes that arithmetic in three ways. First, the margin that previously sat with the supplier is available to the carmaker, assuming it can match the supplier's yields — a large assumption, and the reason most attempts at vertical integration in batteries have taken longer and cost more than planned. Second, the carmaker controls the specification: cell format, chemistry, thermal behaviour and charging profile can be tuned to the vehicle architecture rather than the other way round. For a company that has built its reputation on range and fast charging, that control has product value as well as cost value.

Third, it removes a single point of failure. Concentrated supply is efficient until it is not, and the last several years have given every automaker a lesson in what happens when one component and one supplier sit on the critical path. Li Auto is not the first Chinese manufacturer to reach this conclusion, and the direction of travel across the industry has been consistent: the largest EV makers want at least a share of their cell supply to be their own.

The Li 6 carries the change into Europe

The detail that matters most outside China is the Li 6. It is the model intended for European sale, and it will get the new cells. That puts Li Auto's own battery technology directly in front of European regulators, European crash and homologation testing, European charging infrastructure and European buyers — all at the same time as the company is proving out the technology at home.

Launching a new cell and a new export market together is the harder version of both problems. Warranty exposure in Europe is measured over long horizons, and battery degradation claims are the most expensive kind. A cell that performs in Chinese duty cycles has to hold up through European winters, motorway speeds and a charging network with different power profiles. Against that, using proprietary cells in the export model gives Li Auto a cleaner story on supply chain provenance at a moment when European policy is increasingly interested in where batteries and their inputs come from.

What CATL loses, and how much

For CATL, the loss is volume from one customer rather than a change in its position in the market. The company supplies a broad base of automakers in China and abroad, and no single account defines it. But the pattern is what deserves attention: when a supplier's largest customers each decide to internalise part of their cell demand, the supplier's growth increasingly has to come from new accounts, from export contracts, and from energy storage rather than from the domestic automotive base that built it.

That is the structural question the industry will be arguing about through the rest of this decade. Cell manufacturing is capital-intensive and scale-sensitive; the economics reward the biggest plants. Carmakers that split volume between an in-house line and an external supplier risk ending up subscale on both. The companies that make vertical integration work tend to be the ones with enough unit volume to fill a plant on their own.

The stock going into the news

Li Auto shares last traded at 11.81 on the quote feed, up 1.37% from a previous close of 11.65, with a session range of 11.75 to 12.03, as of the close on 11 September 2026. The wider market finished the same session higher: the S&P 500 tracker (NYSEARCA: SPY) closed at $764.29, up 0.85%; the Nasdaq 100 tracker (NASDAQ: QQQ) at $714.88, up 0.87%; and the Dow tracker (NYSEARCA: DIA) at $525.79, up 0.97%.

Nothing in a single session's move tells you how the market will price a multi-year change in where a carmaker's cells come from. The read-through arrives later, in gross margin lines and in warranty provisions.

What to watch from here

• Confirmation of how much of Li Auto's cell demand is covered in-house versus still bought from CATL, and over what timetable.
• Whether the in-house cells appear across the range or only in selected models alongside the Li 6.
• Gross margin disclosure in the quarters after the changeover — the clearest evidence of whether the integration is paying.
• The Li 6's European homologation and launch timing, and the warranty terms attached to the new cells.
• Any signal from CATL on how it is replacing automotive volume as its largest domestic customers integrate backwards.

The claim is simple; the execution is not. Designing a cell is not the same as manufacturing one at automotive quality and cost, and the companies that have tried have generally found the gap wider than the plan allowed. Li Auto has now put that gap on the critical path of its European launch.

Key facts

• Ticker and last price: LI — 11.81, +1.37%, at the close on 11 Sep 2026
• Previous close: 11.65; session range 11.75–12.03
• Supplier being displaced: CATL, currently a cell supplier to Li Auto
• Model affected: Li 6, the version intended for Europe, gets the in-house cells

Frequently asked questions

What exactly is Li Auto changing?

Li Auto is reducing its dependence on CATL as a battery cell supplier and will increasingly fit cells it has developed itself. The Li 6, the model intended for the European market, is among the vehicles that will receive the new in-house battery technology, according to a report by electrive published on 12 September 2026.

Why would a carmaker develop its own battery cells?

The battery pack is usually the most expensive component in an electric vehicle. Developing cells in-house lets a manufacturer capture the margin a supplier would otherwise keep, tune the cell specification to its own vehicle architecture, and reduce exposure to a single external supplier. The trade-off is heavy capital spending and the difficulty of matching a specialist's manufacturing yields.

Does this mean CATL loses Li Auto as a customer entirely?

The report describes a reduction in dependence rather than a complete break. Li Auto is shifting increasingly toward its own cells, but the share of volume that remains with CATL and the timetable for the transition have not been quantified in the available facts. That split is one of the key details to watch in future disclosure.

When does the Li 6 launch in Europe?

The Li 6 is described as the model intended for Europe and is set to carry the new in-house cells, but a specific European launch date has not been stated in the available information. Homologation, warranty terms and charging compatibility will all need to be settled before European deliveries begin.

How did Li Auto shares perform most recently?

Li Auto stock last traded at 11.81 on the licensed quote feed, up 1.37% from a previous close of 11.65, with a session range of 11.75 to 12.03, as of the close on 11 September 2026. The broader US market closed higher in the same session, with the S&P 500 tracker up 0.85%.

What effect could in-house cells have on margins?

In principle, keeping cell production internal moves supplier margin onto the carmaker's own income statement. In practice, the benefit only appears once manufacturing yields and scale approach those of an established cell maker, and it can be offset by upfront capital costs and warranty risk. The evidence will show up in gross margin lines over several quarters.

Sources

• Li Auto replaces CATL cells with its own battery cells — electrive

Photo: Castorly Stock · Pexels Licence — source