CBAT Q3 2025: Raw Materials Revenue Jumps 144% as Battery Expansion Nears 6GWh
CBAT delivered a decisive turnaround in Q3 2025, underpinned by a 144% surge in raw materials revenue and visible progress on battery capacity expansion. The company’s dual focus on ramping production and stabilizing battery segment profitability positions it for outsized growth in 2026, though export policy uncertainty continues to cloud overseas expansion plans. With new lines coming online and customer demand outpacing supply, CBAT’s operational execution will be critical as it moves toward 6GWh of production by next year.
Summary
- Raw Materials Recovery Accelerates: High-trans segment rebounds sharply, reversing years of overcapacity drag.
- Battery Backlog Drives Capacity Expansion: Persistent supply-demand imbalance pushes new lines into production at Nanjing and Dalian.
- Export Policy Uncertainty Persists: Overseas manufacturing ambitions remain on hold pending regulatory clarity.
Performance Analysis
CBAT’s third quarter marked a clear inflection point, with consolidated revenue rebounding 36.5% year-over-year to $16.9 million, propelled by a dramatic recovery in the high-trans raw materials segment. High-trans, which had been hampered by industry-wide overcapacity and price declines since its 2021 acquisition, delivered $27.2 million in revenue, a 143.7% YoY increase, as raw material prices rebounded and demand normalized.
Battery segment revenue stabilized after a short-term decline, returning to prior-year levels with 0.7% YoY growth. Segment net income rebounded 123% to $4.53 million, driven by robust demand for the Model 32-140 battery, which continues to run at full capacity with a significant order backlog. New production lines at Dalian and Nanjing are set to bring total battery capacity above 6GWh by the end of 2026, with mass production slated for Q1 2026. Profitability improved across the board, as consolidated net income attributable to shareholders reached $2.65 million, up 150-fold YoY.
- Raw Materials Turnaround: High-trans narrowed its net loss by 19% YoY, signaling a shift toward breakeven as industry conditions recover.
- Battery Profitability Surges: Net income in the battery segment more than doubled, despite flat revenue, reflecting mix improvement and cost discipline.
- Capacity Constraints Remain: Persistent backlog for Model 32-140 batteries is driving accelerated commissioning of new lines.
CBAT’s operational focus is now on scaling up to meet demand, while navigating policy headwinds that could impact its global ambitions.
Executive Commentary
"Raw material prices have rebounded steadily driving a meaningful turnaround at high trends. In the third quarter alone, high trends generate approximately $27.2 million in revenue, representing a 143.7% increase year-over-year... Given the current supply-demand imbalance in the market, we anticipate this expansion will make a substantial contribution to next year's sales."
Zhiguang Hu (Jason), Chief Executive Officer
"With both segments showing meaningful improvement in profitability, our consolidated net income attributable to Seabag Energy shareholders reached $2.65 million, representing a 150-fold increase year-over-year... Combined with the ongoing recovery of our raw materials industry, which continues to strengthen high-transit results, we believe that our overall performance in the coming quarters and years will deliver sustainable value for our shareholders and investors."
Jiawei Li, Chief Financial Officer & Company Secretary
Strategic Positioning
1. Raw Materials Segment: Recovery and Margin Rebuild
The high-trans segment, which produces NCM (nickel-cobalt-manganese) raw materials for battery manufacturers, has shifted from multi-year losses to rapid revenue growth as prices and demand rebounded. Leadership expects continued improvement, with a path to profitability if current market conditions persist. This segment’s rebound is critical, as it now acts as a margin lever and hedge against battery market volatility.
2. Battery Segment: Capacity Expansion and Backlog Monetization
CBAT’s battery business, focused on prismatic and cylindrical lithium cells for light electric vehicles (LEV), is experiencing sustained demand, notably for the Model 32-140. Backlog and supply shortages have prompted accelerated investment in production at both the Nanjing and Dalian plants, with new lines adding 2GWh and 2.3GWh of capacity, respectively. These expansions are designed to capture pent-up demand and support revenue growth through 2026.
3. Overseas Expansion: Strategic Intent Versus Policy Reality
While CBAT has signed a term sheet with a major Asian partner for an overseas lithium battery facility, progress remains frozen due to China’s export controls on lithium battery materials and equipment. Management underscores that establishing a stable overseas base is a top priority for global customer reliability, but execution is contingent on regulatory clarity—a risk factor that could delay or derail this growth vector.
4. Customer Mix and Market Penetration in LEV
CBAT’s LEV (light electric vehicle) battery sales are concentrated in Southeast Asia and India, with commercial relationships spanning the top 10 Indian two-wheeler OEMs and leading battery swapping providers. Market penetration is deepening, but management acknowledges batch delivery and ongoing supply to major partners rather than broad customer diversification. Sustained growth will require both capacity ramp and customer base expansion.
Key Considerations
CBAT’s Q3 2025 results reflect a business at the intersection of cyclical recovery and structural growth, with both upside and execution risk as it scales.
Key Considerations:
- Material Price Tailwind: High-trans’ performance is highly sensitive to raw material price cycles, making continued recovery a key profit driver.
- Capacity Execution Risk: Timely ramp of new Dalian and Nanjing lines is essential to monetize backlog and fulfill customer commitments.
- Export Policy Overhang: Overseas expansion remains a strategic imperative, but is entirely dependent on Chinese regulatory shifts—an external variable outside management’s control.
- Customer Concentration in LEV: Current LEV growth is tied to a handful of large customers in Southeast Asia and India, heightening exposure to demand shifts or contract changes.
Risks
CBAT faces acute external risks from China’s export controls, which could stall or prevent overseas manufacturing expansion, a key pillar of its growth strategy. Execution risk is also present in the scale-up of new battery lines, where delays or quality issues could erode customer confidence and future orders. Finally, raw material price volatility remains a double-edged sword for both the high-trans segment and overall margin structure.
Forward Outlook
For Q4 2025, CBAT expects:
- Mass production at new Dalian and Nanjing lines to commence, with backlog conversion accelerating.
- Continued profitability improvement in both battery and raw materials segments.
For full-year 2025, management reaffirmed its focus on:
- Expanding total battery capacity above 6GWh by year-end 2026, aligned with received customer orders.
Management highlighted several factors that will shape results:
- Raw material market recovery as a tailwind for high-trans.
- Export policy decisions as the gating factor for overseas plant execution.
Takeaways
CBAT’s Q3 signals a business in transition, with cyclical recovery in raw materials and structural capacity expansion in batteries setting the stage for 2026.
- Turnaround in High-trans: Rapid revenue and margin recovery in raw materials segment is now a foundational profit lever, but remains cyclical.
- Battery Growth Hinges on Execution: Timely commissioning of new lines and conversion of backlog will determine the pace of sales and earnings growth next year.
- Export Policy Is the Wildcard: Overseas manufacturing ambitions are credible but hostage to China’s evolving lithium export regime, which could either unlock or stall CBAT’s global positioning.
Conclusion
CBAT’s Q3 2025 results mark a decisive shift, with both raw materials and battery segments demonstrating renewed momentum. Execution on capacity ramp and navigation of export policy risk will determine whether this momentum translates into durable, global growth in 2026 and beyond.
Industry Read-Through
CBAT’s results highlight the volatility and opportunity in the lithium battery supply chain, especially as raw material prices rebound and global electrification demand persists. Capacity bottlenecks and regulatory friction are likely to remain industry-wide themes, with Chinese export controls emerging as a critical determinant of where new production is sited. Battery manufacturers globally should be prepared for ongoing supply-demand imbalances and policy-driven shifts in the competitive landscape, especially for those reliant on Chinese upstream inputs or seeking to diversify sourcing for reliability and compliance reasons.