The analyst rating from UBS is based on several key factors:
1. Cost-Competitive Advantage: CATL has maintained a cost-competitive advantage in both domestic and overseas production, as highlighted in their 2026 battery teardown report.
2. Battery Production Costs: Although the cost of batteries produced in Hungary is estimated to be USD10-15 per kilowatt-hour higher than those produced in China, the operating profit margin of the Hungarian plant is expected to be similar to that of domestic plants.
3. Leadership in Cost, Scale, and Technology: UBS believes that CATL's leadership in global cost, scale, and technology positions the company well for multiple growth opportunities, particularly as the electrification of electric vehicles and energy storage systems accelerates.
4. Target Price Increase: UBS has raised its target price for CATL from HKD640 to HKD660, reflecting confidence in the company's future performance.
These factors collectively support UBS's "Buy" rating for CATL.
