--- title: "CATL bought back RMB800 million as shares fell 11.41%; a 2% battery tax lifts its tax bill to RMB2.21 billion" description: "The world's largest battery maker bought back RMB800 million of its own shares on October 21, into an 11.41% fall, and lost 4% more the next day. The cause, a 2% battery tax CATL cannot yet pass on to carmakers, has one month booked; gross margin is already the lowest since 2022." publisher: "The Inference" section: "Power" published: 2026-10-22T13:10:47.309Z modified: 2026-10-22T13:10:47.309Z canonical: https://theinference.org/article/catl-bought-back-rmb800-million-as-shares-fell-11-41-a-2-battery-tax-lifts-its-tax-bill-to-rmb2-21-billion language: en keywords: "CATL, Batteries, EV Supply Chain, China, Stocks, Earnings" --- # CATL bought back RMB800 million as shares fell 11.41%; a 2% battery tax lifts its tax bill to RMB2.21 billion > The world's largest battery maker bought back RMB800 million of its own shares on October 21, into an 11.41% fall, and lost 4% more the next day. The cause, a 2% battery tax CATL cannot yet pass on to carmakers, has one month booked; gross margin is already the lowest since 2022. ## A buyback into a 17% fall Two trading sessions took about 17% off [CATL](https://theinference.org/markets/companies/catl) (HKEX: 3750, Shenzhen: 300750), the maker of 39.4% of the world's electric-vehicle batteries [2], after third-quarter profit missed every published forecast and a new tax the company cannot yet pass on took its first bite [1]. The Hong Kong-listed shares [fell 6.58% on October 20 and 11.41% on October 21, closing at HK$364.80](https://www.globalchinaev.com/post/catl-shares-drop-11-as-new-battery-tax-bites-full-quarter-hit-still-to-come) [1]. On that second day CATL [bought back 3.49 million of its Shenzhen-listed shares, about RMB800 million](https://www.itiger.com/news/1125265723) at RMB227.51 to RMB231.38 each [3]; the stock fell another 4%, to HK$350.40, on October 22 [3]. On September 11 it had paid RMB330.15 to RMB331.61 for its own shares, so even the buyback price has dropped roughly 30% in six weeks [4]. Founder, chairman and chief executive Robin Zeng has watched $14.9 billion leave his net worth this year [5]. ## Record revenue, 2022 margins Third-quarter revenue rose 58.58% year on year to a record RMB165.22 billion, but net profit rose only 14.54%, to RMB21.25 billion [1]: the slowest growth in nearly two years against a [consensus expecting 41.2%](https://www.msn.com/en-us/money/companies/chinas-catl-third-quarter-profit-growth-slowest-in-nearly-two-years-as-competition-intensifies/ar-AA2fEw5G) [2], and below Bernstein, [Goldman Sachs](https://theinference.org/markets/companies/goldman-sachs) and CLSA [1]. Gross margin fell to 20.69%, from 23.15% in the second quarter and 25.80% a year earlier, the lowest since the fourth quarter of 2022 [1]. Management put most of the drop on a quarter heavy in low value-added products, ahead of tax and rebate cuts [1][6]. *Chart: **Q3 profit came in below every published broker forecast** Bar chart of CATL's reported third-quarter net profit of RMB21.25 billion against broker forecasts from Bernstein and Goldman Sachs, both higher.* *Net profit attributable to shareholders, RMB billions, Q3 2026; broker figures are pre-results estimates. CLSA had guided RMB25–26 billion. Source: company results via GlobalChinaEV. [1]* *Chart: **Gross margin has slid five points in a year to its lowest since Q4 2022** Column chart of CATL quarterly gross margin falling from 25.80% in Q3 2025 to 23.15% in Q2 2026 and 20.69% in Q3 2026.* *Quarterly gross margin, %, as reported. Source: company filings via GlobalChinaEV. [1]* ## One month of tax, no way to pass it on Beijing [restored a 2% consumption tax on lithium-ion batteries on September 1](https://www.pv-magazine.com/2026/09/01/china-restores-2-lithium-ion-battery-tax-after-11-year-exemption/), ending an 11-year exemption; the statutory rate returns at 4% in September 2027 [7]. The value-added-tax rebate on exported batteries, cut from 9% to 6% in April, ends on January 1 [1][7]. One month of the new tax still nearly quadrupled the quarterly bill for taxes and surcharges, to RMB2.21 billion from RMB597 million [1]. Chief financial officer Zheng Shu told the earnings call the tax sits inside the product price, so CATL cannot pass it on until contracts are renegotiated [1]; [in a stock exchange filing it said](https://finance.yahoo.com/technology/articles/battery-billionaire-robin-zeng-sees-084909725.html) it hopes "we can shoulder the costs together" with customers [5]. ## A profit fight JPMorgan has already called Carmakers ran a 3.6% profit margin in the first seven months while CATL booked RMB45.7 billion in the first half, more than 85% of the battery industry's profit [8]. Rival cell makers EVE Energy and Lishen put the 2% on customer invoices; the customers pushed back, and the talks continue [7][8]. JPMorgan cut CATL's Hong Kong-listed shares to neutral, target HK$500 from HK$725, and called the squeeze a redistribution of profit along the chain, with CATL hit first and smaller cell makers harder [1]. Rival CALB fell 3.57% and battery-equipment maker Lead Intelligent 9.58% alongside [1]. Ming Lee, head of Greater China automotive and industrial research at [BofA](https://theinference.org/markets/companies/bank-of-america) Securities, still expects the costs to be shared [8], and management sees 20–30% global demand growth as achievable in 2027, with China's storage battery sales up 111.8% to 595.4 GWh in nine months [1]. ## The quarter that decides it The fourth quarter is the first to carry the tax in full [1]. Watch the margin line against 20.69 and the cash line: nine-month operating cash flow fell 23.6% while prepayments to suppliers rose 85.26% [1], the float shift [our September piece on CATL's suppliers](https://theinference.org/article/the-customers-walk-catl-s-suppliers-carry-the-float) flagged. The export rebate ends on January 1 [1][7], and the tax is already scheduled to double, to 4%, in September 2027 [7]. ## Takeaway CATL's Q3 profit miss and a 2% battery tax it cannot yet pass on cut gross margin to a three-year low; an RMB800 million buyback did not stop an 11.41% slide, and the full-quarter tax hit lands in Q4. ## Sources 1. [GlobalChinaEV, "CATL shares drop 11% as new battery tax bites, full-quarter hit still to come", 21 October 2026](https://www.globalchinaev.com/post/catl-shares-drop-11-as-new-battery-tax-bites-full-quarter-hit-still-to-come) 2. [Reuters via MSN, "China's CATL third-quarter profit growth slowest in nearly two years as competition intensifies", 20 October 2026](https://www.msn.com/en-us/money/companies/chinas-catl-third-quarter-profit-growth-slowest-in-nearly-two-years-as-competition-intensifies/ar-AA2fEw5G) 3. [Tiger Brokers (Market Focus), "HK Movers | CATL Falls as Buyback Support Meets Continued Post-Earnings Pressure", 22 October 2026](https://www.itiger.com/news/1125265723) 4. [boerse-global.de via ad-hoc-news, "CATL Tries to Draw a Line Under a Bruising Month", 22 September 2026](https://www.ad-hoc-news.de/boerse/news/unternehmensnachrichten/catl-tries-to-draw-a-line-under-a-bruising-month/70153365) 5. [Forbes via Yahoo Finance, "Battery Billionaire Robin Zeng Sees $14.9 Billion Erased From Net Worth Amid Slower Growth, 'De-CATLization'", 21 October 2026](https://finance.yahoo.com/technology/articles/battery-billionaire-robin-zeng-sees-084909725.html) 6. [Global Times, "CATL shares fall over 10% Wednesday as Q3 earnings miss market expectations; company sees growth potential in 2027", 21 October 2026](https://www.globaltimes.cn/page/202610/1372718.shtml) 7. [pv magazine, "China restores 2% lithium-ion battery tax after 11-year exemption", 1 September 2026](https://www.pv-magazine.com/2026/09/01/china-restores-2-lithium-ion-battery-tax-after-11-year-exemption/) 8. [South China Morning Post via MSN, "China's EV and battery makers tussle over paying resumed lithium-ion tax: sources", 24 September 2026](https://www.msn.com/en-xl/money/economy/china-s-ev-and-battery-makers-tussle-over-paying-resumed-lithium-ion-tax-sources/ar-AA2cVsMg) --- CATL bought back RMB800 million as shares fell 11.41%; a 2% battery tax lifts its tax bill to RMB2.21 billion — The Inference. Canonical: https://theinference.org/article/catl-bought-back-rmb800-million-as-shares-fell-11-41-a-2-battery-tax-lifts-its-tax-bill-to-rmb2-21-billion