In the first year of the “15th Five-Year Plan”, China’s new energy industry is standing at a historical turning point from “scale expansion” to “high-quality development”.
Major enterprises in the industry chain, represented by CATL, have created an astonishing profit scale with their world-leading market share and technological innovation.
This profit pattern led by leading companies not only reshapes the business logic of vehicle manufacturing, but also points out the path for high value growth for the tire industry chain that follows.
Under the multiple resonances of new energy, intelligence and globalization, the tire industry chain is ushering in a golden window period for substantial profit growth.
The chain owner effect appears, and the high-profit model guides industrial upgrading.
The ultra-high profitability demonstrated in CATL’s 2025 financial report provides a valuable business template for the entire new energy supporting system.
The core logic of its net profit of 72.2 billion yuan and net profit margin of nearly 20% lies in two points: first, to achieve economies of scale through extremely high production capacity utilization (96.9%), pushing unit costs to the extreme; second, to rely on continuous technological innovation to form a quality premium, and to realize the export of technology and standards to overseas markets.
This combination of “high quality wins premium, high share wins profit” is profoundly affecting the tire industry.
Faced with the long-term homogenization involution in the past, the “15th Five-Year Plan” clearly requires comprehensive rectification of low-price competition and promotion of industry upgrading to mid-to-high-end.
Tire companies will follow the successful experience of chain owner companies, shift from simply “fighting for output” to “fighting for value”, and obtain higher profit margins through high-end iterations.
The demand structure is reshaped, and specialized products generate high premiums.
The disruptive changes in the physical properties of tires caused by new energy vehicles have directly created a huge market for high value-added products.
Because new energy vehicles have greater weight, stronger instantaneous torque and extremely high requirements for silence, their tire wear speeds up significantly and the replacement cycle is significantly shortened.
This has brought a certain increase in stock replacement to the tire industry.
More importantly, EV-specific tires and smart tires that can adapt to low rolling resistance, strong load-bearing, silent and noise reduction have extremely high technical barriers.
The “15th Five-Year Plan” clearly states that it is necessary to increase the penetration rate of original equipment of special tires for new energy vehicles, and the market share of domestic brands in the mid-to-high-end market will increase by more than 20%.
This means that tire companies that master core technologies and can provide customized solutions for OEMs will receive a “quality premium” similar to that in the power battery field, thereby getting rid of low-end price wars and achieving structural repair of profit margins.
Full-link digital empowerment and ultimate efficiency build a cost moat.
To achieve a significant leap in profits in the heavy-asset manufacturing industry, it must achieve extreme cost reduction and efficiency improvement on the production side.
Just as CATL maintains ultra-high production capacity utilization through intelligent manufacturing and dynamic exchange mechanisms, the tire industry chain is also accelerating the construction of full-link digital forward design capabilities.
During the “15th Five-Year Plan” period, tire companies will comprehensively implement high-precision simulation and virtual verification, and deepen the application of AI in material research and development and pattern design.
This not only greatly shortens the development cycle, but also promotes automation and backward integration on the production side.
As domestic leading tire companies accelerate their second round of overseas expansion, establish localized production bases overseas and flexibly allocate global orders, tire companies will effectively avoid the risk of trade barriers, further dilute manufacturing costs through efficient global collaboration, and lay a solid foundation for profit growth.
The business model has been upgraded and transformed from a single transaction to a full life cycle service.
If power batteries earn money from hardware sales and technical standards, then the future profit growth point of the tire industry chain lies in the upgrading of the service model.
Especially in the fields of commercial vehicles (trucks) and construction machinery, the core demands of customers have changed from simply “buying tires” to reducing comprehensive operating costs.
The plan clearly proposes to promote the upgrading of truck tires and engineering tires to high-end and specialization, and expand full life cycle services.
This means that tire companies will no longer be limited to a single product transaction, but will transform into a one-stop solution that provides mileage management, energy consumption control, intelligent tire pressure monitoring, and waste tire retreading and recycling.
When tires become quantifiable and traceable data nodes, the industry chain has successfully integrated from the traditional manufacturing industry into the modern service industry, opening up a second growth curve with long-term stability and high gross profit.
To sum up, during the “15th Five-Year Plan” period, the tire industry chain is by no means passively following, but actively benchmarking the development logic of the chain’s main enterprises.
By absorbing quality premiums, embracing specialized needs, practicing digital intelligent manufacturing and innovative service models, the tire industry chain will surely break the curse of meager profits in traditional manufacturing, usher in substantial growth in profit levels, and ultimately achieve a gorgeous transformation from a manufacturing power to an intelligent manufacturing power.
