1. Introduction: A Quiet Ascent to the Top
In March 2026, the pecking order of the global power tools industry was quietly rewritten. Techtronic Industries (TTI) released its FY2025 results—revenue of USD 15.3 billion, surpassing for the first time Stanley Black & Decker (USD 15.1 billion), the American giant that had ruled this industry for over a century. A company headquartered in Hong Kong, manufacturing in the Pearl River Delta and Vietnam, and holding two major brands—Milwaukee and Ryobi—a company with Chinese roots, had claimed the top seat in global power tools.
This ascent drew almost no public attention. Unlike phones or cars, power tools are not a category consumers talk about every day—it is an "invisible" industry, tucked into a renovation worker's tool belt, sitting on a garage workbench, buried inside a lawn mower's engine. Yet it is precisely this unremarkable industry that harbors one of Chinese manufacturing's most complete—and most easily underestimated—global comebacks: for every ten power tools sold worldwide, six to eight are made in factories run by Chinese and Chinese-backed enterprises; China's power tool exports reached USD 9.758 billion in 2024, up 21%; and from Qidong in Jiangsu to Wuyi in Zhejiang, county-level cities cluster thousands of power tool enterprises, sending "made in China" drills, saws, grinders, and cutters to job sites and garages around the world.
But this "ascent to the top" conceals a paradox shared with tires and much of Chinese manufacturing. Although TTI reached the top, its flagship brands Milwaukee and Ryobi are American brands—only their manufacturing and capital sit within the Chinese system; the enterprises that truly fly the "Chinese brand" banner (Dongcheng, Devon, Ruiqi) are mostly still stuck in the mid-to-low-end and domestic markets. China produces 60% to 80% of the world's power tools, yet the brand premium and profits of the high-end professional-grade market (Milwaukee, Bosch, Hilti, Makita) remain largely in the hands of European, American, and Japanese brands. China is the "world's factory" for power tools, but not yet a "brand powerhouse" in power tools—this is yet another version of "big but not strong" in the power tools industry.
The power tools industry in 2026 also carries an unprecedented external shock—the tariff roller coaster. In 2025, the Trump administration's tariff policies at one point pushed the combined tax rate on Chinese tools shipped to the US above 79%, forcing Chinese enterprises into a frenzied shift of capacity to Vietnam, Thailand, and Mexico; then in February 2026, the US Supreme Court struck down part of those tariffs, turning the tide. Amid these tariff storms, the fortunes of Chinese power tool enterprises diverged sharply: TTI, leaning on its diversified global production footprint, bucked the trend to set a new gross margin high of 41.2%, while Chervon (the EGO brand), overly dependent on the US, saw revenue fall 8.2% and net profit drop 13.3%. Same industry, same year, same tariffs—yet fire and ice.
Meanwhile, the industry itself is undergoing two profound technological transformations. One is the shift to cordless—lithium batteries replacing power cords, taking power tools from "plug-in" to "cordless." By 2024, cordless tools already accounted for about 65% globally, and the platformization of lithium batteries (one battery pack shared across hundreds of tools) became a core weapon for locking in users and building moats. The other is the electrification of outdoor power equipment (OPE)—lawn mowers, chainsaws, and snow blowers moving from gasoline to lithium power. On this new track, Chinese brands (Ryobi, EGO, Greenworks) have captured the leading share of the North American market, and robotic lawn mowers have been turned by Chinese enterprises (Ninebot, Songling, Ecovacs) into a fresh growth frontier.
This report uses fifty thousand words to trace the Chinese power tools industry from the construction of a single tool to the global landscape of an entire industry: how TTI reached the top and how much that ascent is really worth, how China achieved 60% to 80% of global output yet why brand profits remain controlled by others, how the tariff roller coaster reshaped the global production layout, how cordless and platformization changed the rules of competition, how OPE and robotic lawn mowers became new battlefields for Chinese brands to overtake on the curve, and how far China's road from "big" to "strong" has come in this "invisible" industry.
First, a word on the route this report takes. The first seven chapters cover the machine and the landscape: what a power tool is, the paradox of the world's factory, TTI's ascent and the attack-and-defense of the three giants, the tariff roller coaster, the great capacity migration, and industrial geography. The middle dozen or so chapters cover a cross-section of the present: the cordless revolution and battery platforms, OPE overtaking on the curve and robotic lawn mowers, the fire-and-ice of financial results, the king of channels, the battle for battery cells, the domestic-demand base, brushless and smart tools, certification barriers, and the hidden champions upstream. The final few chapters cover judgment: a risk checklist, a comparison group, and a conclusion. The full text is long—this invisible yet vast industry deserves the length; readers who want only the main thread can, after finishing the introduction, jump straight to the three chapters "The Paradox of the World's Factory," "OPE Electrification," and "The Risk Checklist," where all the conclusions lie.
Let us begin with the most basic question: what makes a single power tool capable of becoming a hundred-billion-dollar global industry?
2. What Is a Power Tool: The Hundred-Billion-Dollar Business of Three Components
A power tool looks simple—a motor, a handle, and a working head (drill bit, saw blade, sanding disc). But making these three things reliable, durable, and pleasant to use at a "professional-grade" level is a precision business built up over a century, supporting a global market worth hundreds of billions of dollars. To understand the barriers to entry in power tools, one must start with its three core components.
The first component is the motor—the heart of the tool. The motor determines the tool's power, efficiency, and lifespan. Power tool motors have gone through a generational upgrade from brushed to brushless: traditional brushed motors are simple and cheap, but the carbon brushes wear out, efficiency is low, and lifespan is short; brushless motors (BLDC) have no carbon brushes—they are more efficient, last longer, deliver more power, and can be precisely regulated through electronic control—making them standard equipment for modern professional-grade power tools. The penetration of brushless motors is a main thread in the technological upgrading of power tools. China has a deep foundation in the motor industry (suppliers such as Johnson Electric and Jiangsu Leili), and the localization and scaling of brushless motors is a strong link in the Chinese power tool supply chain.
The second component is the battery—the lifeline of cordless tools. This is the biggest transformation power tools have seen in the past decade or so. Traditional tools rely on a power cord (corded), limited by the power source and the cable; the maturing of the lithium battery let tools "cut the cord"—cordless tools are powered by rechargeable lithium battery packs, usable anywhere, flexible and portable. Going cordless is the core trend of the power tools industry; by 2024, cordless tools already accounted for about 65% globally, and lithium batteries made up over 90% of cordless-tool batteries. And the battery is not merely a component—it is also a strategic weapon for locking in users; a later chapter will specifically discuss how "battery platformization" became a moat for power tool enterprises. The high-rate cylindrical cells used in batteries (18650, 21700) are another link where China is rapidly displacing Japan and South Korea.
The third component is the working head and transmission—the "hand" of the tool. Drill bits, saw blades, sanding discs, impact mechanisms, gearboxes—these parts that directly do the work determine the tool's performance and applicable scenarios. The impact mechanism of a hammer drill, the high-speed transmission of an angle grinder, the striking system of a rotary hammer—each type of tool has its own dedicated working head and transmission design, involving accumulated know-how in precision mechanics, materials, and structure. This link looks unremarkable but is the watershed between "professional-grade" and "toy-grade"—for the same electric drill, a professional-grade one can run continuously under heavy load for years without breaking, while a cheap one may fail after a few uses; the difference lies in the quality and design of the motor, transmission, and working head.
Put the three components together, and the barrier of power tools becomes clear—it is not a single point of high technology (unlike chips or gas turbines with their extreme technical ceilings), but rather the "reliability of systems integration": integrating motor, battery, transmission, working head, housing, and electronic control into a durable, usable, safe product requires combined accumulation across materials, mechanics, electronics, and ergonomics. This barrier looks low (anyone can build a drill) but is in fact deep (building a drill that professional workers trust and that runs continuously under heavy load for years without breaking takes a century of experience and data). This is why the power tools industry has long been dominated by century-old brands like Milwaukee, Bosch, Makita, and Hilti—their moat lies not in a single technology, but in the reliability of systems integration and the accumulation of brand trust.
The market structure of power tools also determines its competitive logic. It divides into two major markets: professional-grade (Professional, aimed at professional workers in construction, industry, and repair, who value reliability and durability and are willing to pay a premium for quality—a high-profit market) and DIY-grade (aimed at ordinary consumers for home use, who value cost-effectiveness and are price-sensitive—a volume market). In 2024, about 60% of global power tool revenue came from industrial/professional applications, but the DIY segment grew fastest. Professional-grade is where brand premium and profit lie—Milwaukee and Hilti earn high profits on professional-grade; DIY-grade is the battlefield of scale and volume—Ryobi and Chinese brands win here on cost-effectiveness. The rise of Chinese power tools began precisely from the DIY-grade (volume on cost-effectiveness), gradually climbing toward professional-grade (quality and brand)—a climb whose logic is identical to how tires climb from the replacement market to the original-equipment market, and from the mid-to-low-end to the high-end.
Having understood the construction and market of a single power tool, let us now look at how this hundred-billion-dollar global market is being carved up by China and a handful of giants—a landscape being reshaped by Chinese forces.
3. Professional vs. Amateur: The Different Logics of Two Markets
The power tools industry has an invisible dividing line—professional-grade (Professional) and DIY-grade (amateur). The logics of these two markets are entirely different, and only by understanding their divide can one see clearly the situation and opportunities of Chinese power tools in the different markets.
First, the positioning of the two markets. Professional-grade is aimed at professional workers in construction, industry, and repair—they make a living with their tools, and the tool is a means of production. Professional users value reliability (running continuously under heavy load without breaking), durability (lasting years), and performance (working fast and well), and are willing to pay a premium for quality. This is a high-profit market—Milwaukee and Hilti earn handsome profits on professional-grade. DIY-grade is aimed at ordinary consumers for home use—they occasionally use tools for renovation or repair, and the tool is a consumer good. DIY users value cost-effectiveness (cheap and good enough) and ease of use (simple to pick up), and are price-sensitive. This is a volume market—Ryobi and Chinese brands win here on cost-effectiveness. In 2024, about 60% of global power tool revenue came from industrial/professional applications, but the DIY segment grew fastest (about 8.15% per year).
The competitive logics of the two markets are completely different. Professional-grade competes on "reliability and brand trust"—when professional workers choose a tool, what they value is "whether this brand's tool can run continuously under heavy load for years without breaking, and whether there is service if it does break," and such trust is built through long-term word of mouth. So the professional-grade market has forbidding brand barriers, dominated by century-old brands like Milwaukee, Bosch, Hilti, and DeWalt, which new brands find very hard to enter. DIY-grade competes on "cost-effectiveness and channels"—when DIY users choose a tool, what they value is "cheap, good enough, and easy to buy," and brand loyalty is relatively low. So the DIY-grade market is relatively open, and Chinese brands (Ryobi, Greenworks) can seize share on cost-effectiveness and channels (Home Depot, Amazon).
The situation of Chinese power tools in the two markets is starkly divided. In DIY-grade, Chinese brands are already strong—Ryobi (TTI) is the world's largest consumer cordless brand, Greenworks is strong on the Amazon channel, and a large number of Chinese tools occupy the DIY and mid-to-low-end market. DIY-grade is the strength of Chinese power tools—on cost-effectiveness, capacity, and channels, China has captured a large slice of the DIY market. But in professional-grade, China is still climbing with difficulty—the high-end professional-grade is still dominated by century-old brands like Milwaukee, Bosch, Hilti, and Makita, and the share and premium of Chinese brands are both limited. Although Milwaukee (under TTI, with Chinese roots) is growing strongly in professional-grade, the breakthrough of pure Chinese brands (Dongcheng, Devon) in professional-grade is still climbing.
This "strong in DIY, weak in professional-grade" situation is a concrete manifestation of Chinese power tools being "big but not strong." China makes most of the world's power tools and dominates the DIY volume market, but in the high-profit, high-brand professional-grade market it is still controlled by the European, American, and Japanese giants. DIY-grade contributes the "big" (volume, scale); professional-grade is the "strong" (high profit, brand premium). For Chinese power tools to move from "big" to "strong" is, to a large extent, to climb from "strength in DIY-grade" to "strength in professional-grade"—breaking into the professional-grade market dominated by century-old brands and earning high profits and brand premium.
Why is climbing from DIY-grade to professional-grade so hard? Because the brand barriers in professional-grade are the most forbidding. Professional workers make a living with their tools; their demands on reliability are almost unforgiving, and they place extreme value on brand trust—they will not use an unknown brand just to save a little money (should the tool break and the job be botched, the loss far exceeds that small price difference). This "barrier built from reliability and trust" is far harder to storm than the price barrier of the DIY market. For Chinese brands to break into professional-grade, they must not only build reliably (quality) but also establish the trust of professional users (brand)—and trust is accumulated over the long term through word of mouth, with no shortcuts.
But Chinese power tools do have paths to break through in professional-grade. First, the Milwaukee model—TTI acquired the professional-grade brand Milwaukee and empowered it with Chinese manufacturing, building an advantage in professional-grade. Second, the new-track model—EGO built an advantage in professional-grade OPE (commercial lawn crews) with its 56V platform, bypassing the brand barriers of traditional professional-grade. Third, the niche-breakthrough model—Dongcheng and Devon gradually built the trust of professional users in specific professional niches (such as professional tools for specific trades) on quality and cost-effectiveness. These paths show that climbing from DIY-grade to professional-grade can rely on acquiring brands, opening new tracks, or breaking through in niches, but all require building the trust of professional users over the long term.
The divide between professional and amateur is a key to understanding Chinese power tools' move from "big" to "strong." The "big" of Chinese power tools rests mainly on the volume advantage in DIY-grade; the "strong" of Chinese power tools must come from breakthroughs in brand and profit in professional-grade. Climbing from DIY-grade to professional-grade is the core path for Chinese power tools to transform from "master of quantity" to "power of quality," and it is also the hardest stretch of road—because the brand-trust barriers of professional-grade are the most forbidding, requiring long-term accumulation of quality and word of mouth. TTI's Milwaukee and Chervon's EGO have already broken through in professional-grade, pointing the way for Chinese power tools; and more Chinese enterprises need to follow this road, climbing step by step from strength in DIY volume to strength in professional-grade brands. This leap decides whether Chinese power tools can truly move from "big" to "strong."
4. The Global Landscape: TTI's Overtaking and the Attack-and-Defense of the Three Giants
In FY2025, a landmark change occurred in the global power tools landscape—Techtronic Industries (TTI), with revenue of USD 15.3 billion, overtook Stanley Black & Decker (USD 15.1 billion) for the first time to become the global number one. This overtaking is a microcosm of the shift of power in global power tools from established European and American names to emerging forces. Laying out the situations of the several giants reveals the full picture of this shift in the landscape.
TTI—the new king who reached the top against the trend. Techtronic Industries is headquartered in Hong Kong, with manufacturing bases in the Pearl River Delta, Vietnam, the US, Mexico, and Europe, and holds two major brands: Milwaukee (professional-grade flagship) and Ryobi (consumer leader). In FY2025 it delivered a stunning scorecard: revenue of USD 15.3 billion, up 4.4% and a record; net profit of USD 1.198 billion, up 6.8%; an EBIT margin of 8.8%; and a gross margin as high as 41.2%—setting a new gross margin high against the trend in a year of tariff besiegement. Milwaukee grew 8.1% for the year, and Ryobi grew 5.4%. Its free cash flow was nearly USD 1.4 billion and net cash USD 700 million—an extremely healthy balance sheet. The secret of TTI's ascent is the combination of "high-end brand (Milwaukee) + global production footprint + cordless leadership"—Milwaukee's high gross margin lifted overall profit, the diversified global footprint hedged tariffs, and cordless leadership (TTI put forward the "cordless domination" strategy) captured the industry trend.
Stanley Black & Decker—the old king in the pain of transformation. This American century-old giant (with brands such as DeWalt and Craftsman) posted FY2025 revenue of USD 15.1 billion, down 2%, overtaken by TTI. It is going through a painful transformation: in 2022 it launched a global cost-reduction program, achieving USD 2.1 billion in cost savings by the end of 2025, with cumulative layoffs of about 7,000 and factory closures; at the end of 2025 it sold its aerospace business for USD 1.8 billion to focus on the core tool business; and in October 2025 it changed its chief. Its predicament is concentrated in tariffs—in 2025 it disclosed an annualized tariff impact of about USD 800 million, with two rounds of price increases to hedge. Q1 2026 stabilized (revenue of USD 3.85 billion, up 3%, EPS beating expectations), but being overtaken by TTI is already a fact. Stanley Black & Decker's pain is a typical microcosm of an established giant under cost pressure, tariff shocks, and sluggish transformation.
Bosch, Makita, Hilti—each holding its own ground. Bosch Power Tools (Germany), with revenue of about EUR 5 billion and 17,300 employees, has set a goal to "double sales by 2030," but the group's profit was under pressure in 2025, and it will close two German factories by the end of 2026 and shift capacity to Hungary—the European giant is also nearshoring to cut costs. Makita (Japan) posted FY2026 revenue of JPY 777.6 billion, up a slight 1.6%, but operating profit fell. Hilti (Liechtenstein, focused on professional-grade) had revenue of CHF 6.3 billion, with 9.3% growth in the Americas market. These giants each have their own turf (Bosch's European DIY, Makita's global professional-grade, Hilti's high-end engineering), but all face cost pressure and the impact of Chinese forces.
Put the situations of these giants together, and the shift in the global power tools landscape becomes clear. The top five (Stanley Black & Decker, TTI, Bosch, Makita, Hilti) together account for about 45% to 50% of global revenue—concentration is not extremely high, and there remain many small and medium brands and Chinese contract manufacturing. And this landscape is being reshaped by three forces. First, the rise of Chinese capital—TTI's ascent and the rise of Chervon's EGO brand in North America show enterprises with Chinese roots moving from contract manufacturing to brands, from following to leading. Second, the shock of cost and tariffs—the high-cost structures of the European, American, and Japanese giants are under pressure amid tariffs and competition, forcing layoffs, factory closures, and capacity relocation. Third, the reshuffle of cordless—cordless and platformization have redefined the rules of competition, with those who caught the trend (TTI, EGO) rising and the slow to react falling behind.
The deepest meaning of TTI's ascent is not "one company surpassing another," but that the industrial center of gravity of global power tools is shifting toward the Chinese system. Although TTI's brands are American (Milwaukee, Ryobi), its manufacturing, supply chain, and capital sit largely within the Chinese and Asian systems; its ascent is in essence a victory of the "Chinese manufacturing + global brand" model. And purer Chinese brands (Chervon's EGO, Dongcheng, Devon) are also climbing from contract manufacturing and domestic sales toward global brands. The shift in the global power tools landscape is a microcosm of the all-round rise of Chinese forces (whether Chinese manufacturing or Chinese brands) in this invisible industry.
But TTI's ascent cannot conceal the other side of Chinese power tools being "big but not strong"—China produces 60% to 80% of the world's power tools, yet much of the profit and the brands still rest in the hands of European, American, and Japanese names. This "master of output, catching up on brand" paradox—identical to tires and much of Chinese manufacturing—is the theme of the next chapter.
5. Stanley Black & Decker: A Giant's Self-Rescue
The other side of TTI's ascent is the difficult self-rescue of Stanley Black & Decker, the American century-old giant. Its predicament and struggle are a typical microcosm of an old king of global power tools under the triple pressure of cost, tariffs, and transformation, and deserve to be dissected separately.
First, the weight of this giant. Stanley Black & Decker holds a set of century-old brands including DeWalt (professional-grade), Craftsman (mass market), and Stanley (hand tools), and is the old king that ruled the global tools industry for over a century. But in FY2025 its revenue was USD 15.1 billion, down 2%, overtaken by TTI (USD 15.3 billion), losing the top seat it had held for years. Being overtaken is not itself the most painful part; the most painful is the systemic predicament it has fallen into—stalled growth, high costs, sluggish transformation, and step-by-step erosion by Chinese forces.
Stanley Black & Decker's self-rescue is a painful history of slimming down. In mid-2022 it launched a global cost-reduction program, achieving USD 2.1 billion in pre-tax cost savings by the end of 2025 (beating the target of over USD 2 billion); since the end of 2023 it laid off about 7,000 people globally, closed factories (including cutting 300 jobs at a tape-measure plant in Connecticut), standardized SKUs and components, and destocked. In December 2025, it sold its aerospace fasteners business (CAM) to Howmet for USD 1.8 billion, recovering funds to pay down debt and focus on the core tool business—another round of slimming after its 2024 sale of the infrastructure business (USD 729 million). In October 2025 it also changed its chief, with a new CEO taking office. Layoffs, factory closures, asset sales, a change of chief—this is the full set of moves of a giant cutting off an arm to survive in adversity.
Stanley Black & Decker's most painful wound is tariffs. In 2025 it disclosed an annualized tariff impact of about USD 800 million (assuming an incremental 30% on China, 30% on non-USMCA Mexico, over 20% on others, and 50% on Section 232 metals)—USD 800 million in tariff costs nearly swallowed a full year of its net profit. Its response was two rounds of high-single-digit price increases to hedge, plus USD 2 billion in cost cuts. But price increases suppress demand (tools are price-sensitive), and cost cuts have limits—Stanley Black & Decker is caught between tariffs and demand, stuck in a bind. It plans to cut the share of Chinese capacity to below 5% by the end of 2026, using North American capacity to hedge—but restructuring capacity is itself costly and long in cycle.
Interestingly, Stanley Black & Decker's predicament precisely sets off TTI's success. Facing the same tariffs, TTI responded flexibly with its diversified global production footprint (China, Vietnam, the US, Mexico, Europe), bucking the trend to set a new gross margin high of 41.2%; whereas Stanley Black & Decker, with a relatively concentrated footprint (North America plus China), took a more direct tariff hit and had to spend heavily to restructure capacity. Facing the same costs, TTI leaned on the high gross margin of Milwaukee to lift profit, while Stanley Black & Decker's DeWalt and Craftsman brands, strong as they are, carry a heavier overall cost structure. Facing the same competition, TTI led in cordless and seized the trend, while Stanley Black & Decker was relatively slow to transform. This contrast shows that in the same industry environment, the flexibility of the global capacity layout, the share of high-end brands, and the grasp of trends determine the rise and fall of the giants.
Stanley Black & Decker's self-rescue also reveals the common predicament facing the old kings of global power tools. It is not just Stanley Black & Decker—Bosch is closing two German factories and shifting capacity to Hungary, Makita's profit is falling, and Hilti's growth is slowing. The European, American, and Japanese old kings of power tools all face the triple pressure of a high-cost structure, tariff shocks, and erosion by Chinese forces, and are all laying off, closing factories, relocating capacity, and focusing on the high end. They hold on to brand and the high end (the professional-grade of DeWalt, Bosch, and Makita), but are losing ground steadily in the mid-to-low-end and on cost. The collective predicament of the old kings is the other side of the shift of power in global power tools from established European and American names to Chinese forces—TTI's rise came precisely by stepping up on the predicament of these old kings.
But be clear-eyed: although Stanley Black & Decker was overtaken and fell into difficulty, it is far from down. It has the century-old brands DeWalt, Craftsman, and Stanley, deep channels and technical accumulation, and it stabilized in Q1 2026 (revenue up 3%, EPS beating expectations). Its self-rescue—slimming down, focusing, raising prices, restructuring capacity—is painful, but if it succeeds, it remains a top player in global power tools. Stanley Black & Decker's story is not the fall of a giant, but the difficult turn of a giant amid a change of era. Whether it can turn successfully depends on whether it can restructure costs, hold the high end, and adapt to the new normal of tariffs.
Stanley Black & Decker's self-rescue offers Chinese power tools a mirror—even the ascendant TTI cannot rest easy. Today TTI reached the top on its global capacity, high-end brands, and cordless leadership, but if it falls, like Stanley Black & Decker, into high costs, sluggish transformation, and erosion by new rivals, it too will tumble from the throne. The throne of global power tools has never been eternal—it belongs to those who can continually adapt to tariffs, grasp trends, and hold the high end. For Chinese power tools to move from "big" to "strong," it is not enough to reach the top; they must learn to adapt continually as TTI does, and avoid falling into predicament as Stanley Black & Decker did. This is the profound lesson the giant's self-rescue leaves for all players.
6. The Paradox of the World's Factory: 60% to 80% of Output, With the Brands in Others' Hands
The most core characteristic of the Chinese power tools industry—as with tires and much of Chinese manufacturing—is a paradox: China produces 60% to 80% of the world's power tools, yet the brands and high-end profits still rest largely in the hands of European, American, and Japanese names. This "world's factory, others' brands" paradox is the key to understanding the Chinese power tools industry.
First, the weight of the "world's factory." China's power tool output accounts for about 65% to 80% of the global total (the figures differ by measure, but China is unquestionably the world's largest production base), and the export rate of finished products and components exceeds 80%—a highly export-oriented industry. In 2024, China's power tool exports reached USD 9.758 billion, up 21% (with growth as high as 44.6% and 32.2% in October and November respectively—a rush-to-export effect). From Qidong in Jiangsu to Wuyi in Zhejiang, county-level cities cluster thousands of power tool enterprises, sending "made in China" drills, saws, grinders, and cutters to the whole world. That China is the world's factory for power tools is beyond dispute.
Now the awkwardness of "others' brands." China makes 60% to 80% of the world's power tools, but much of it is contract manufacturing (ODM) for European, American, and Japanese brands—Chinese factories build them, stick on others' labels, sell at others' prices, and earn a little processing fee. The brand premium and profit of the high-end professional-grade market (Milwaukee, Bosch, Makita, Hilti, DeWalt) rest largely in the hands of European, American, and Japanese names. One figure is telling—TTI's EBIT margin is 8.8%, while the Chinese domestic professional power tool listed company Ruiqi is running losses. In the same power tools industry, those holding the brands (TTI, Bosch) earn high profits, while those doing contract manufacturing and the mid-to-low-end (many Chinese factories) earn thin margins or even losses. This is the portrait of "big but not strong" in the power tools industry—master of output, but with brand and profit controlled by others.
But this paradox is more complex, and also somewhat more optimistic, than in the tire industry, because Chinese power tools already have several samples of "brand breakthrough." First, the TTI model—although Milwaukee and Ryobi are American brands, TTI has Chinese roots (its founder is the Chung family of Hong Kong), and its manufacturing and supply chain sit largely in China; its ascent is to some extent a victory of "Chinese capital + Chinese manufacturing + global brand." Second, Chervon's EGO—Chervon is an enterprise in Nanjing, and its EGO brand reached the top of the North American outdoor power equipment (OPE) market (a dollar share of about 14.9%), a global high-end brand built by a purely Chinese enterprise. Third, Dongcheng—number one in Chinese power tool sales for 12 consecutive years, a representative of Chinese domestic professional power tool brands, and in 2024 the first Chinese power tool brand to make the "Asia's 500 Most Influential Brands" list. The breakthroughs of these several enterprises show that Chinese power tools can do more than contract manufacturing—they can also build brands—which is somewhat further ahead than the tire industry (where brand breakthrough is only just beginning, with only Sailun entering the global top ten brands).
Why is the brand breakthrough of Chinese power tools further ahead than tires? A few reasons. First, the new track of OPE. The electrification of outdoor power equipment (lawn mowers, etc.) is a new track with an unsettled landscape, and Chinese brands (Ryobi, EGO, Greenworks) grabbed position early, capturing the leading share of the North American OPE market—the new track gave Chinese brands a chance to overtake on the curve (detailed later). Second, the window of cordless. Going cordless redefined power tools, and those who caught this trend (TTI's cordless domination strategy, EGO's 56V platform) built advantages. Third, cross-border e-commerce and DTC. Some Chinese tool brands reach overseas consumers directly through cross-border e-commerce such as Amazon, bypassing the brand barriers of traditional channels. These factors have given the brand breakthrough of Chinese power tools more progress than tires.
But be clear-eyed: brand breakthrough is still the minority. TTI (American brand, Chinese roots), EGO (Chinese brand, North American OPE leader), and Dongcheng (Chinese brand, domestic sales number one) are samples of breakthrough, but a large number of Chinese power tool enterprises are still stuck in contract manufacturing and the mid-to-low-end—they build 60% to 80% of the world's power tools, earning a meager processing fee, with brand and profit taken away by European, American, and Japanese names. This "minority breakthrough, majority contract manufacturing" landscape is identical to the "top climbing, tail involution" of tires—Chinese power tools are diverging sharply, with a batch of top enterprises climbing toward brand and the high end while a large number of small and medium factories remain stuck in contract manufacturing and the mid-to-low-end.
The path to cracking this paradox is consistent with tires and all of Chinese manufacturing—climbing toward brand and the high end. Use cordless and platformization technology (TTI, EGO) to build advantages, use the new track of OPE (Ryobi, EGO, Greenworks) to overtake on the curve, use cross-border e-commerce to reach consumers directly, and use smart manufacturing to cut costs and raise efficiency. The road of Chinese power tools from "world's factory" to "brand powerhouse" is climbed out bit by bit precisely from these directions. And this climb cannot avoid the biggest external shock of 2025 to 2026—the tariff roller coaster. It is both a test of survival for Chinese power tools and a force that reshaped the entire industry's global capacity layout.
VII. Contract Manufacturing and Brands: The Divide Between OBM and ODM
To understand why China's power tools are "big but not strong," one must grasp a key divide in business models—OBM versus ODM. Behind these two acronyms lie two starkly different paths, "build your own brand" versus "manufacture for others," and they are the deep-seated source of the diverging fortunes of Chinese power tool companies.
First, let us explain the two concepts. ODM (Original Design Manufacturer)—the company handles design and manufacturing but applies someone else's label and sells at someone else's price, earning a processing fee that covers design plus manufacturing. OBM (Original Brand Manufacturer)—the company builds its own brand and controls the brand, channels, and pricing power, earning a brand premium. ODM is "we can build it, and build it well, but the brand belongs to someone else"; OBM is "we can build it, and we sell under our own brand and earn the brand's money." The profits along these two paths differ enormously—ODM earns a thin processing fee, while OBM earns a rich brand premium.
China's power tools being "big but not strong" is, to a large extent, the result of "many ODMs, few OBMs." A vast number of Chinese power tool companies follow the ODM route—doing contract manufacturing for European, American, and Japanese brands (and even for the private labels of Home Depot and Lowe's), building sixty to eighty percent of the world's power tools yet applying someone else's label and earning a thin processing fee. The brand premium and high-end profits are captured by the European, American, and Japanese companies and channel operators who hold the brands. This is why China builds most of the world's power tools yet sees profits flow largely to others—the fate of the ODM is to "sew a wedding gown for someone else."
But China's power tools have already produced a batch of OBM breakthrough players. TTI represents the pinnacle of OBM—it holds two major in-house brands, Milwaukee and Ryobi, controls the brand, channels, and pricing power, and earns a rich brand premium (a 41.2% gross margin). Chervon's EGO is a global OBM built entirely by a Chinese company—it has climbed to the top tier of the North American OPE market, controlling its own brand and pricing. Dongcheng is the standard-bearer of China's homegrown OBM—the domestic sales champion for 12 consecutive years and a Chinese independent power tool brand. Great Star Tools, meanwhile, runs on "twin wheels of OBM + ODM"—it has in-house brands such as WORKPRO (OBM accounting for roughly 48%) while also doing ODM contract work. These OBM breakthrough players have escaped the fate of "thin margins from contract work" and earn a premium off their own brands—they are the vanguard of China's power tools moving from "big" to "strong."
The divide between OBM and ODM determines a company's profits and destiny. Companies that take the OBM path (TTI, EGO, Dongcheng) control the brand and pricing, enjoy rich profits and strong resilience to risk, and can post record highs against the tide in a tariff year (TTI). Companies that take the ODM path can only earn a processing fee, with thin margins and weak resilience, and are the first to be hurt under the twin pressures of tariffs and competition. This divide mirrors the pattern of China's power tools "the head climbing, the tail caught in involution"—the leading OBM companies climb toward brand and the high end, while small and medium ODM companies are trapped in contract work and thin margins. The upgrade from ODM to OBM is the single most crucial path for China's power tools to move from "big" to "strong."
Why is the upgrade from ODM to OBM so hard? Because it requires crossing the chasm of branding. ODM only requires building well (manufacturing capability); OBM additionally requires building a brand (brand capability)—and a brand is trust accumulated over a century, the long-term deposit of channels, marketing, and reputation, far harder to build than manufacturing capability. Many Chinese power tool companies are trapped in ODM not because they cannot build well (they build the world's best tools for others to label), but because they cannot build a brand—without a brand, they can only apply someone else's label and earn a processing fee. The upgrade from ODM to OBM is essentially the leap from "strong in manufacturing" to "strong in brand," and this leap is the hardest lesson for China's power tools (and indeed for Chinese manufacturing as a whole).
But there are also multiple paths for an OBM breakthrough. TTI's path is "capital + brand acquisition" (the Horst family acquired brands such as Milwaukee and Ryobi and empowered them with Chinese manufacturing). EGO's path is "independent brand in a new track" (building its own brand on the new OPE track). Dongcheng's path is "independent brand for the domestic market" (establishing an independent brand in the domestic market and gradually replacing foreign brands). Great Star's path is "cross-border e-commerce in-house brands + acquisitions" (using DTC and acquisitions to build a brand matrix). These different OBM paths show that the upgrade from ODM to OBM has no single road—the key is to identify one's own strengths (capital, new track, domestic sales, cross-border e-commerce) and build the brand in the way that fits best.
The divide between OBM and ODM is the key to understanding both why China's power tools are "big but not strong" and how they can move "from big to strong." China's power tools being "big" is, to a large extent, the bigness of ODM (building much, building well, but the brand belongs to someone else); China's power tools becoming "strong" depends on OBM breakthroughs (building one's own brand and earning the brand premium). From ODM to OBM, from "world's factory" to "world's brand," from "sewing a wedding gown for someone else" to "wearing one's own clothes"—this is the single most crucial transformation for China's power tools to move from "big" to "strong." The OBM breakthrough players like TTI, EGO, Dongcheng, and Great Star have already pointed the way; and the many more Chinese companies trapped in ODM need to follow this road and complete the perilous leap from contract work to brand. Whether this leap can be made, and how many companies can make it, will determine whether China's power tools can truly move from "big" to "strong."
VIII. The Tariff Roller Coaster: From 79% to the Supreme Court
From 2025 to 2026, China's power tool industry rode a tariff roller coaster of unprecedented intensity. Its violence exceeded that of tires, exceeded that of most industries—in little more than a year, the tariff rate on Chinese tools exported to the U.S. soared from 25% to over 79%, then was knocked back to its original form by the Supreme Court. Only by understanding this roller coaster can one understand why Chinese power tool companies frantically relocated capacity and why their fortunes diverged so sharply.
First, look at the starting point of the roller coaster—the Section 301 tariffs. From 2018 to 2019, the Section 301 tariffs of Trump's first term imposed an additional 25% (7.5% in some cases) on Chinese goods exported to the U.S. (including power tools). This was the first tariff wall China's power tools faced, and it had already prompted companies to begin relocating capacity to Vietnam and Thailand.
The roller coaster's first steep climb came in 2025. After Trump's second term took office, tariff policy escalated dramatically: a 10% "fentanyl tariff" on China in February 2025, raised to 20% in March, and the April "reciprocal tariffs" that climbed all the way from 34% to 125%. Stacked together, the composite tariff rate on Chinese tools exported to the U.S. reached as high as 145% or even 170%. Great Star Tools' framing is that after this round of increases, most tool categories exported from China to the U.S. carried a cumulative tariff of roughly 79%. What does 79% mean? It nearly doubles the price of Chinese tools—at this rate, direct tool exports from China to the U.S. were almost unprofitable. Panic spread across the entire industry, and companies frantically relocated capacity to Vietnam, Thailand, and Mexico.
The roller coaster also swept up the countries of origin. The April 2025 reciprocal tariffs targeted not only China but also the destinations to which Chinese companies were relocating capacity: Thailand 36%, Vietnam 46%, Cambodia 49%, Indonesia 32%. Chinese companies had meant to go to Southeast Asia to avoid tariffs, only to find Southeast Asia hit with high tariffs too—for a moment, there was nowhere to hide. Fortunately, following negotiations from late July to October 2025, these rates fell sharply (Thailand, Vietnam, and Cambodia to roughly 19% to 20%). And the more pivotal turn came in February 2026—the U.S. Supreme Court ruled 6 to 3 that the reciprocal tariffs and fentanyl tariffs Trump had imposed under the International Emergency Economic Powers Act (IEEPA) were all unlawful and void, customs ceased collection from February 24, and the scale of refunds was up to roughly $175 billion. The effective tariff rate on Chinese goods to the U.S. plunged from 36.8% to about 21.2%. Having surged to its peak, the roller coaster suddenly plunged back down.
But the roller coaster was not entirely over. The Supreme Court overturned the IEEPA tariffs, but the Section 301 tariffs (including the 25% imposed on lithium batteries starting January 2026) remained firmly in place—and lithium batteries are an unavoidable Chinese link in power tools (especially cordless tools). Trump promptly switched to Section 122 of the Trade Act of 1974 to sign a separate 10% global tariff. The tactics were changing, but the tariff pressure on Chinese tools was not entirely eliminated. And although the IEEPA tariffs were overturned, whether they might make a comeback in some other legal form in the future remains an open question.
The most profound impact of this roller coaster on Chinese power tool companies was "uncertainty" itself. Tariff rates soaring from 25% to 79% within a year, then falling back to 21%—this violent swing was even more agonizing for companies than a high tariff itself. Companies could not plan—decide to relocate capacity today based on a 79% rate, and tomorrow the tariff is overturned, and the relocation investment may be wasted; do not relocate, and fear the tariff will make a comeback. This extreme uncertainty was the greatest challenge Chinese power tool companies faced from 2025 to 2026. It forced companies into dilemma-ridden decisions: relocate capacity to hedge tariffs (high cost, high risk), or bet on tariffs falling (save cost, but risk being swallowed by high tariffs).
The roller coaster also caused a sharp divergence in corporate fortunes. Companies with diversified global production bases (TTI's manufacturing spans China, Vietnam, the U.S., Mexico, and Europe) could respond flexibly and posted a record-high 41.2% gross margin against the tide; whereas companies overly dependent on the U.S. with a single production base (Chervon, with 77% of revenue from the U.S. and still in a relocation transition) saw revenue fall 8.2% and net profit fall 13.3%. In the same tariff roller coaster, companies with diversified bases stood as steady as a mountain, while companies with a single base were battered all over. This divergence reveals a cruel truth—amid the raging waves of tariffs, "diversity and flexibility of global capacity layout" is the most important survival capability.
The deepest lesson of the tariff roller coaster is this: the fate of China's power tools (and indeed of all Chinese manufacturing heavily dependent on exports to the U.S.) increasingly hinges on "the capability of global layout." Only companies that can lay out flexibly across multiple production bases worldwide and dynamically adjust in response to tariff changes can ride through the roller coaster; companies with a single base and over-dependence on the U.S. will be hurt by the violent tariff swings. This is also why the tariff roller coaster gave rise to yet another round of large-scale capacity relocation for China's power tools—the scale, logic, and truth of this relocation are the subject of the next chapter.
IX. A Tariff Chronicle: Six Years from Section 301 to the Supreme Court
The previous chapter gave an overview of the tariff roller coaster; here we lay out the six years of tariff milestones one by one—because every decision by Chinese power tool companies to relocate capacity, raise prices, or arrange their layout was forced out of them by these specific milestones. This tariff chronicle is the time coordinate for understanding the survival strategies of China's power tools.
2018 to 2019—the four rounds of Section 301 tariffs. The Section 301 tariffs of Trump's first term were imposed in four rounds: the first round of $34 billion (July 2018, 25%), the second round of $16 billion (August 2018, 25%), the third round of $200 billion (10% from September 2018, raised to 25% in May 2019), and round four A (roughly $120 billion, 15% from September 2019, lowered to 7.5% after the Phase One agreement in January 2020). Power tools mostly fell within these rounds, subject to an additional 25% or 7.5%. This was the first tariff wall China's power tools faced, and it had already prompted companies to begin relocating to Vietnam and Thailand. It is worth noting that the Section 301 tariff exclusion applications exceeded 53,000, of which on average only about 13% were approved—most companies failed to obtain exemptions and could only bear the tariffs.
September 2024—the lithium battery tariff is settled. USTR's four-year review made a decision of far-reaching impact on power tools: the Section 301 rate on non-EV lithium-ion batteries would rise from 7.5% to 25% starting January 1, 2026. Although hundreds of objections were received, no exemption was granted. This directly struck the battery packs of cordless power tools and OPE—and lithium batteries are an unavoidable Chinese link for cordless tools. This 25% lithium battery tariff is a wall that remains firmly in place to this day.
2025—the surge and stacking of reciprocal tariffs. After Trump's second term took office, tariffs escalated dramatically: a 10% "fentanyl tariff" on China in February 2025, raised to 20% in March, and the April "reciprocal tariffs" climbing from 34% to 125%, stacking to a maximum composite of 145% to 170% on Chinese goods. Great Star Tools' framing is that after this round of increases, most tool categories exported from China to the U.S. carried a cumulative rate of roughly 79%. At the same time, the reciprocal tariffs also struck the relocation destinations—Thailand 36%, Vietnam 46%, Cambodia 49%, Indonesia 32%. Chinese companies had meant to go to Southeast Asia to avoid tariffs, only to find Southeast Asia taxed too.
May to October 2025—negotiated pullback. The Geneva statement of May 12, 2025 saw China and the U.S. lower tariffs mutually, with reciprocal tariffs cut from 125% to 10% (for 90 days); extended another 90 days in August; and in November the agreement was extended for one year to November 10, 2026, with the fentanyl tariff lowered from 20% to 10%. The July U.S.–Vietnam agreement confirmed a 20% tariff on Vietnam-origin goods and 40% on transshipment (including simple processing of Chinese content). The October agreements between the U.S. and Cambodia, Malaysia, Thailand, and Vietnam settled reciprocal tariffs of Thailand 19%, Cambodia 19%, and Vietnam 20%. The roller coaster fell back from its peak.
February 2026—the Supreme Court's turning point. The U.S. Supreme Court ruled 6 to 3 that the reciprocal tariffs and fentanyl tariffs Trump had imposed under IEEPA were all unlawful and void, customs ceased collection from February 24, refunds were up to roughly $175 billion, and the effective tariff rate on Chinese goods fell from 36.8% to about 21.2%. Trump promptly switched to Section 122 of the Trade Act of 1974 to sign a separate 10% global tariff (a 150-day limit, requiring congressional extension). The roller coaster plunged back down, but was not entirely over—the Section 301 tariffs (including the 25% on lithium batteries) remained firmly in place, and whether tariffs might make a comeback in the future remains an open question.
Reading through this chronicle, three patterns emerge. First, tariff tactics changed violently—from Section 301 to fentanyl to reciprocal to Section 232, from imposition to negotiation to Supreme Court overturn, the rate soared from 25% to 79% within a year and then fell back to 21%. This violent swing was even more agonizing for companies than a high tariff itself. Second, lithium batteries are the steadiest wall—no matter how the reciprocal tariffs changed, the 25% Section 301 tariff on lithium batteries held firm throughout, and lithium batteries are an unavoidable Chinese link for cordless tools. Third, the relocation destinations are being hunted down too—the U.S. reciprocal tariffs on Southeast Asia and the 40% penalty on "transshipment" show that simply moving assembly to Vietnam is no longer enough; one must also satisfy the rules of origin.
This tariff chronicle is the cipher for understanding why Chinese power tool companies frantically relocated capacity and why their fortunes diverged so sharply. Why did TTI spread its production across five countries (to hedge volatile tariffs), why was Chervon in such a hurry to raise its Vietnam capacity share to 70% (to avoid China tariffs), why were companies caught in a dilemma (relocate and fear the tariff is overturned, do not relocate and fear the tariff makes a comeback)—the answers all lie hidden in these milestones. The violent swings and high uncertainty of tariffs were the greatest challenge Chinese power tool companies faced from 2025 to 2026, and the fundamental reason that "the capability of global capacity layout" was forced out as a core competitive edge. Whoever can read this tariff chronicle and lay out flexibly accordingly can survive the roller coaster; whoever has a single base and over-dependence on the U.S. will be badly hurt by the tariff swings.
X. The Great Capacity Relocation: The Truth About China Plus One
The tariff roller coaster forced out yet another round of large-scale capacity relocation for China's power tools—a shift toward Vietnam, Thailand, and Mexico. But the truth of this relocation is far more complex than the simple narrative of "Chinese manufacturing moving to Southeast Asia." It is in fact "China Plus One"—not a departure from China, but an extension of China's industrial chain by one stop.
First, look at the scale and direction of the relocation. Nearly all leading companies are relocating capacity overseas. TTI invested $650 million to build a plant in Ho Chi Minh City, Vietnam (with a design capacity of 24.75 million units a year), diversifying its production bases across Vietnam, Mexico, and the U.S., and expects roughly half its capacity to be in the U.S. plus Vietnam by the end of fiscal 2026. Chervon built a plant in Binh Duong, Vietnam (commissioned in 2020), and brokerages estimate its Vietnam capacity share rising from about 10% in 2023 to 65% to 70% by the end of 2026. Great Star Tools built plants in Thailand, Vietnam, and Cambodia, with Thailand shipments exceeding $100 million. Globe Tools has two major bases in Hai Phong and Thai Binh, Vietnam, and by 2025 its Vietnam capacity essentially covered U.S. exports. Positec (WORX) has production lines in both China and Southeast Asia. Even the American Stanley Black & Decker plans to lower its China capacity share to below 5% by the end of 2026. A sweeping capacity relocation is reshaping the world's power tool manufacturing map.
But the truth of the relocation is "change the track, not the chain"—the goods have moved from China to Vietnam for assembly, but the components, technology, and supply chain still depend heavily on China. Several hard data points reveal this truth. First, of the electronics products assembled in Vietnam, roughly 40% of imported components come from China—Vietnamese plants are mostly final assembly points rather than the origin of value-added manufacturing. Second, the trade data corroborate this: in the first quarter of 2026, China's exports to the U.S. fell 16%, but its exports to Southeast Asia grew 20%—the goods are shipped from China to plants in Vietnam and Thailand for reassembly and then exported to the U.S., with China's exports merely changing direction and extending by one stop. Third, Vietnam's cost advantage is narrowing—Globe Tools' Vietnam base already has production costs on par with China, showing that Vietnam's low-cost dividend is fading and that relocation is increasingly for tariff avoidance rather than cost reduction.
The essence of "China Plus One" is to extend China's industrial chain by one stop, not to depart from China. What Chinese companies build in Vietnam are "assembly plants," while the core motors, batteries, controllers, and precision structural parts still largely come from China's supply chain—China's power tool industrial clusters (the thousands of supporting enterprises in Qidong and Wuyi) have not moved; only the final assembly link has moved. This is why we say "decoupling is false, relocation is true"—capacity relocation is genuinely happening (Vietnam's share has risen sharply), but supply chain decoupling is an illusion (the core supply chain is still in China). China Plus One = China's chain extended by one stop.
But the U.S. is trying to plug this "China Plus One" loophole. The July 2025 U.S.–Vietnam agreement opened a 20-percentage-point tariff gap between "Vietnam origin" (20% tariff) and "transshipment" (Chinese content with only simple processing, 40% tariff), and also strengthened rules-of-origin audits. This means that if a Vietnamese plant merely does simple assembly of components brought in from China, it may be deemed "transshipment" and taxed at the high 40% rate; only products with genuine value-added manufacturing in Vietnam (using Vietnamese or non-Chinese components) enjoy the low 20% rate. This is a direct challenge to "China Plus One"—it forces Chinese companies not only to move assembly to Vietnam but also to move more of the supply chain (component production) there in order to satisfy the rules of origin. The relocation of the industrial chain is extending from the "assembly link" toward the "deeper supply chain."
The deeper impact of the great capacity relocation is a "passive globalization" of China's power tool industry. This relocation is not companies actively pursuing a global layout, but something forced out by tariffs—without tariffs, Chinese companies would have no reason to move capacity to higher-cost, more managerially complex locations overseas. But the passive relocation has, objectively, pushed China's power tool industry toward globalization: bases in Vietnam, Thailand, and Mexico have been built, and Chinese companies have learned to lay out capacity globally, manage cross-border supply chains, and cope with different tariffs and markets—these capabilities were forced out by tariffs, but will become the future competitiveness of China's power tools.
The great capacity relocation has also produced an intriguing phenomenon: China builds sixty to eighty percent of the world's power tools, yet more and more "made in China" tools bear "made in Vietnam" or "made in Thailand" labels. The place of origin is changing, but the core of the industrial chain (technology, supply chain, capital) is still in China. This is a classic case of the separation of "country of origin" from "industrial-chain ownership" in the age of globalization—a power tool may be assembled in Vietnam and bear a Vietnam-origin label, but its motor, battery, technology, and brand may all come from the Chinese system. China's global layout of power tools is creating a new form of "globalized origin, China-based industrial chain." This form is both a survival strategy in response to tariffs and a manifestation of the depth and resilience of China's power tool industrial chain—it is precisely because China has a complete and powerful industrial chain that it can support assembly bases spread across the globe. And the industrial-chain foundation that supports all this is the subject of the next chapter, on the industrial geography of China's power tools—those county-level cities that have gathered thousands of enterprises.
XI. The Transshipment Predicament: The Game Between the 40% Tariff and Rules of Origin
China's power tools going global under "China Plus One" are running into a new wall—the U.S. rules-of-origin audits. When a Vietnamese plant merely does simple assembly of components brought in from China, it may be deemed "transshipment" and taxed at the high 40% rate. This game over rules of origin is the next battlefield in the capacity relocation of China's power tools.
First, look at how this wall was erected. The July 2025 U.S.–Vietnam agreement opened a 20-percentage-point tariff gap between "Vietnam origin" and "transshipment"—Vietnam-origin goods are taxed at 20%, while goods deemed "transshipment" (containing Chinese content, only simply processed in Vietnam) are taxed at 40%. This 20-percentage-point gap, together with the strengthened rules-of-origin audits by U.S. Customs (CBP), directly challenges the "China Plus One" model. Because many Chinese companies build assembly plants in Vietnam—assembling motors, batteries, controllers, and components brought in from China into finished tools in Vietnam and applying a Vietnam-origin label. But if this is merely "simple assembly," it may be deemed "transshipment" and taxed at 40%, rather than enjoying the 20% Vietnam-origin rate.
The core of the issue is the determination of "substantial transformation." Under international trade rules, for a product to be deemed "originating" in a given country, it must undergo "substantial transformation" in that country—that is, add sufficient value and change the fundamental nature of the product. If it is merely simple assembly (putting components together) without substantial transformation, it does not count as originating and may be traced back to the country of origin of the components (China) for taxation. And the Vietnamese plants of China's power tools are, in many cases, precisely "simple assembly"—the core motors, batteries, and controllers all come from China, and Vietnam only does the final assembly. This falls into the risk zone of "transshipment."
Several data points reveal the depth of this predicament. First, of the electronics products assembled in Vietnam, roughly 40% of imported components come from China—Vietnamese plants depend heavily on Chinese components. Second, in the first quarter of 2026, China's exports to the U.S. fell 16%, but its exports to Southeast Asia grew 20%—goods shipped from China to Vietnam for assembly and then exported to the U.S. leave an obvious "track-change" trace, which is exactly the focus of CBP audits. When the share of Chinese components is high and Vietnam only does simple assembly, the risk of a "transshipment" determination is considerable.
Faced with the transshipment predicament, Chinese power tool companies have several response paths. First, deepen localization—not only moving assembly to Vietnam but also moving more of the supply chain (component production) there, raising the local value-added share in Vietnam to satisfy the rules of origin. This is the most thorough but also the hardest path—moving the entire supply chain to Vietnam requires large investment and a long horizon. Second, diversify production bases—not relying on Vietnam alone but also laying out in Mexico (USMCA exemption), Thailand, Indonesia, and elsewhere, to disperse rules-of-origin risk. Third, compliance management—establishing a robust rules-of-origin traceability and compliance system to prove the product's substantial transformation and avoid a transshipment determination. All these paths add to the cost and complexity of China's power tools going global.
The transshipment predicament reveals the deep fragility of the "China Plus One" model. The essence of "China Plus One" is to extend China's industrial chain by one stop (Vietnam assembly, China supply chain), but this is precisely the model that the U.S. "transshipment" clause aims to strike—what the U.S. wants is not "China Plus One" (assembling in a different place) but "de-Chinaization" (genuine value-added manufacturing in Vietnam or elsewhere). The 20-percentage-point tariff gap and CBP's audits are all forcing Chinese companies from "simple assembly" toward "deep localization," from "China Plus One" toward "genuine industrial relocation." This is a deeper challenge for China's power tools—it requires relocating not only assembly but also the supply chain, and this will weaken the advantage of China's domestic industrial clusters.
But the transshipment predicament also has its limits and room for maneuver. First, deep localization takes time—moving the entire supply chain to Vietnam cannot be done overnight, and in the short term many Chinese companies will still depend on Chinese components and bear transshipment risk. Second, rules-of-origin determination has room for ambiguity—the standard for "substantial transformation" carries a degree of ambiguity and room for maneuver, and companies can strive for a "Vietnam origin" determination by adding value-added stages locally in Vietnam. Third, cost trade-offs—even if taxed at the 40% transshipment rate, if the overall cost is still lower than exporting directly from China (bearing high China tariffs), Vietnam assembly still has value. So the transshipment predicament is not a dead end but a game of cost and compliance—Chinese companies must find a balance between "the cost of deep localization" and "the cost of the transshipment tariff."
The transshipment predicament is a microcosm of the next battlefield in the capacity relocation of China's power tools. It reveals a cruel reality—U.S. tariff policy is escalating from "striking Chinese manufacturing" to "striking the Chinese supply chain," from taxing China's direct exports to taxing third-country products "containing Chinese content." This escalation pushes China's power tools going global from "relocating assembly" toward "relocating the supply chain," sharply raising cost and complexity. And those able to cope with this escalation are the leading companies with the strength for deep localization, diversified layout, and robust compliance; small and medium companies with a single base, dependence on Chinese components, and weak compliance capability will be caught in a bind amid the transshipment predicament. The transshipment predicament is the deepest hurdle in the second half of the globalization of China's power tools, and yet another force driving the evolution from "big but not strong" toward "the strong grow ever stronger."
XII. Industrial Geography: The Invisible Empires of Qidong and Wuyi
China's status as the world's factory for power tools rests on a few specific geographic coordinates—most of them are obscure county-level cities, yet they gather thousands of enterprises and send "made in China" power tools to the whole world. Stepping into these "invisible empires," one can see the most authentic foundation of China's power tool industry.
Qidong, Jiangsu—China's premier power tool city. Qidong (especially Lüsigang Town) is the absolute core of China's power tools. This county-level city has deeply cultivated the power tool industry for over 40 years, gathering more than a thousand power tool enterprises (a 2022 figure of over 650, with 101 above designated size) and producing over 35 billion yuan of power tools a year. Its industrial density is astonishing—Lüsigang Town alone has 658 power tool enterprises and 736 supporting enterprises, with nearly 30,000 people employed locally and over 60,000 jobs driven; the "Tianfen Power Tool Industrial Park" stretches nearly 10 kilometers, and a single village (Ruyi Village) has more than 100 power tool enterprises with an annual output value exceeding 3 billion yuan. Qidong also holds a special position—it is the largest production base for laser measuring instruments, accounting for 90% of national output and 80% of global output. "Power tools sold through Qidong people account for more than 60% of the national sales total" (this is a channel figure, including the trading network). Qidong's exports reached 2.4 billion yuan in 2024, up 18%, with lithium-battery tools already accounting for more than 40% of exports. A county-level city at the mouth of the Yangtze holds up half the sky of China's power tools.
Wuyi, Zhejiang—a cluster of single-product champions. Wuyi is the "China Power Tool Manufacturing Base," with 530 production and supporting enterprises and over 53,000 employees. Its hallmark is the "single-product champion"—its output and export volume of rotary hammers have accounted for more than 70% of the national total since 2001, and its wall sanders account for roughly 65% of the national total. The Jinhua (Yongkang) region where Wuyi is located is the "Capital of China's Hardware," with an annual hardware industry output value exceeding 100 billion yuan. Zhejiang Province as a whole produces over 90 million power tools, accounting for more than 30% of the national total. The Wuyi model represents a typical form of China's industrial clusters—becoming number one nationally or even globally in a niche category (rotary hammers, sanders), relying on specialized division of labor and supporting coordination within the cluster.
Other coordinates—Suzhou, Nanjing, Shanghai, Shandong. Suzhou is where foreign and domestic capital meet—Positec (WORX brand) is headquartered in Suzhou, and the foreign-owned Bosch and Makita also have plants in Kunshan, Suzhou. Nanjing is the headquarters and largest global manufacturing base of Chervon (EGO, FLEX, Devon brands). Shanghai has Ruiqi (Jiangsu Reach; professional-grade angle grinders and cutters). Weida in Weihai, Shandong, has led the world in drill chuck production and sales for 24 consecutive years, with a global market share of roughly 50%, supplying Bosch, Stanley Black & Decker, and Makita—it is a hidden champion in power tool components. These coordinates each have their specialties and together make up the industrial map of China's power tools.
These "invisible empires" reveal the deepest competitive edge of China's power tool industry—the completeness and coordination of the industrial cluster. Take Qidong: it has a "20-kilometer supporting circle," where thousands of enterprises divide labor and cooperate, so that the motor, battery, switch, gearbox, housing, and packaging of a power tool can all be assembled within a radius of a few dozen kilometers. This model of "same-village supporting and clustered development" gives China's power tools cost, efficiency, and response speed that far outpace rivals with dispersed production. If an overseas buyer wants to order a million power tools, Qidong can fulfill it in the shortest time and at the lowest cost—this overall strength of the industrial cluster is something latecomer countries like Vietnam and India cannot replicate in the short term. This is also why, when China's power tools relocate capacity overseas, it is "assembly goes global, the industrial chain stays home"—Vietnamese plants assemble, but the core motors, batteries, and components still come from the industrial clusters of Qidong and Wuyi.
The industrial cluster also explains the "big" side of China's power tools being "big but not strong." These invisible empires build sixty to eighty percent of the world's power tools, relying on the cluster's advantages of scale, cost, and efficiency. But the cluster also has its limits—it excels at manufacturing and contract work (building things, building them cheaply), but not at brand and R&D (selling things at a premium, selling them as a brand). The thousands of enterprises in Qidong and Wuyi are mostly manufacturing and supporting enterprises, lacking world-class brands and core technology—this is the industrial-geographic root of "big but not strong." The cluster's strength lies in manufacturing; the cluster's weakness lies in brand.
For China's power tools to move from "big" to "strong," they must, while maintaining the manufacturing advantage of the industrial cluster, make up for the shortfalls in brand and R&D. This requires the leading enterprises within the cluster (Dongcheng, Devon, Chervon) to climb toward brand and the high end, and requires the industrial cluster to upgrade from a "manufacturing cluster" to a "manufacturing + R&D + brand cluster." The invisible empires of Qidong and Wuyi are the solid foundation of the "bigness" of China's power tools; but to move toward "strength," they need to upgrade from a world's factory that "builds much and builds cheaply" into a world's brand base that "builds well and builds a brand." This upgrade is the next leg of the industrial geography of China's power tools, and the concrete challenge, in the spatial dimension, of moving from "big" to "strong."
Beyond the industrial clusters, the upstream of China's power tool industrial chain also harbors a batch of hidden champions—just like tires and many other industries—that lead the world in niche links and are a deep source of the resilience of China's power tool industrial chain.
XIII. Great Star Tools: Another Road to Being the World's Number Two in Hand Tools
While power tool companies each go their own way, there is one Chinese company that has taken a rather different road—Great Star Tools. It did not start from power tools but reached the world's number two spot in hand tools, then treated power tools as its second growth curve. Great Star's path offers another model for Chinese tool companies moving from "big" to "strong."
First, look at Great Star's position in hand tools. Hand tools (non-electric tools such as wrenches, screwdrivers, hammers, and tool boxes) are a large market adjacent to but independent from power tools. Great Star Tools is Asia's number one and the world's number two in this market—in 2022, its revenue from hand tools and storage boxes/cabinets was 10 billion yuan, with a global market share of roughly 6%, second only to Stanley Black & Decker (16.3%) and ahead of Apex (5.3%). It has 21 manufacturing bases and 5 R&D centers worldwide, sales covering more than 180 countries, and overseas revenue accounting for over 90%. Great Star's success is a model of a Chinese tool company reaching the world's top tier in the niche market of hand tools.
What makes Great Star distinctive is its "twin-wheel drive" of "cross-border in-house brands + acquisitions." On one hand, it has built in-house brands (such as WORKPRO) and reaches overseas consumers directly through cross-border e-commerce—bypassing the brand barriers of traditional channels and building brands via a DTC (direct-to-consumer) model. On the other hand, it expands through acquisitions—having acquired more than 20 international brands including ARROW, LISTA, and TESA (in June 2026 it also plans to acquire the Swiss high-precision measuring tool brand TESA), rapidly gaining brands, technology, and channels through acquisition. This twin wheel of "in-house brands + acquisitions" gives Great Star both its own brand (WORKPRO) and a batch of acquired international brands, forming a complete brand matrix.
And power tools are Great Star's second growth curve. In 2025, Great Star's hand tool business dipped slightly (9.519 billion yuan, down 5.46%), but its power tool business grew strongly against the tide—1.762 billion yuan, up 22.55%, with gross margin also rising by 6.09 percentage points, the only high-growth segment for Great Star. In a year when tariffs suppressed hand tool demand, power tools became Great Star's new growth engine. Great Star's extension from hand tools to power tools is a model of "adjacent diversification"—leveraging the brand, channels, and customers accumulated in hand tools to extend into power tools and open up a second growth curve.
Great Star's path offers several lessons for Chinese tool companies. First, cross-border in-house brands are one road to a brand breakthrough. Great Star's WORKPRO reaches overseas consumers directly through cross-border e-commerce, bypassing the brand barriers of traditional channels like Home Depot and Lowe's—this offers Chinese tool companies a brand-breakthrough path of "skip the mainstream channels, reach consumers directly." Second, acquisition is a shortcut to rapidly gaining brand and technology. By acquiring international brands such as ARROW and TESA, Great Star rapidly gained brands, technology, and channels—far faster than building a brand from scratch. Doublestar acquiring Kumho (tires), Great Star acquiring TESA—Chinese tool companies are using acquisitions to accelerate globalization and branding. Third, adjacent diversification can open up a second curve. Great Star's extension from hand tools to power tools, leveraging existing brands and channels to open up new growth, offers tool companies a model of "adjacent expansion."
Great Star also reveals a more complete picture of China's tool industry—hand tools and power tools are two adjacent large markets, and China has strong strength in both. In hand tools, Great Star is the world's number two, Laisai Laser (construction laser measurement, number two on the leveling-instrument brand ranking), and Weida (number one in the world in drill chucks)—China has a batch of globally leading companies in hand tools and measuring tools. In power tools, TTI, Chervon, Dongcheng, and others are rising. Hand tools and power tools together make up the complete map of China's "tool industry"—and on this map, China is both the output hegemon (building most of the world's tools) and home to a batch of companies climbing toward brand and the high end (Great Star, TTI, Dongcheng). China's tool exports of hand/machine tools alone reached $17.977 billion in 2024—a vast industry.
Great Star Tools' other road offers a valuable model for Chinese tool companies moving from "big" to "strong"—one need not slug it out in the red ocean of power tools; one can reach the world's top tier in adjacent markets such as hand tools and measuring tools, then extend into power tools; one need not fight for shelf space at Home Depot; one can reach consumers directly with in-house brands via cross-border e-commerce; one need not build a brand from scratch; one can rapidly gain international brands through acquisition. Great Star's combination of "world's number two in hand tools + power tools as a second curve + cross-border brands + acquisition-driven expansion" is a successful example of diversification, branding, and globalization for Chinese tool companies. It proves that Chinese tool companies have multiple paths to move from "big" to "strong"—the key is to identify one's own strengths and climb toward brand and the high end in the way that fits best.
XIV. The Cordless Revolution: How Lithium Batteries Cut the Cord
The most profound transformation in power tools over the past decade or so has been "cutting the cord"—the shift from corded tools that plug into the wall to cordless tools powered by lithium batteries. This cordless transition has not only changed the form of the tools; it has reshaped the entire industry's rules of competition, and it has handed China's industrial chain a new opportunity.
Start with the progress of the cordless transition. Traditional power tools run on wall power, constrained by outlets and cables—on job sites without sockets, outdoors, or in scenarios that require mobile work, corded tools are highly inconvenient. The maturing of lithium batteries changed all of this: cordless tools run on rechargeable lithium battery packs, usable anywhere and flexibly portable. The pace of the cordless transition has been striking—the global cordless penetration rate of power tools rose from about 42% in 2016 to about 47% in 2020, and then to about 65% in 2024. From 2020 to 2025, the market size of cordless products grew at an average annual rate of about 9.9%, far higher than the 2.1% for corded products. And within the batteries of cordless tools, lithium batteries account for more than ninety percent—lithiumization is essentially complete within the cordless category. China's domestic cordless penetration rate is about 50% (2024), still below the global 65%—which means there is still ample room for the cordless transition in the Chinese market.
Why is the cordless transition a "revolution" rather than merely an "upgrade"? Because it restructured both the product and the competition. On the product side, cordless tools expanded power tools from "plug-in equipment for professional job sites" to "portable tools that anyone can use"—DIY users, household users, and outdoor users can all use them conveniently, greatly enlarging the market. On the competition side, the cordless transition introduced a brand-new, decisive variable—the battery. Competition among corded tools was mainly about the motor and the working head; competition among cordless tools added a battery dimension—battery capacity, lifespan, charging speed, and, most critically, "platformization" (detailed below) became the new focal points of competition. Whoever can build an advantage in batteries can seize the initiative in the cordless era.
The cordless revolution handed China's industrial chain two new opportunities. The first opportunity lies in battery cells. Cordless tools use high-rate cylindrical cells (18650, 21700), a market once dominated by Japanese and Korean firms such as Samsung SDI and Murata, and now being rapidly displaced by Chinese cell makers. Samsung SDI remains the global leader but with a declining share, Murata is contracting (it recorded a ¥49.5 billion impairment in fiscal 2023), while China's EVE Energy (world No. 2) and Tenpower (world No. 3) are gaining share year by year. Tenpower's tabless 21700 cell has a yield rate of 99% (versus about 90% for the industry) and 15% lower cost, and it has won orders from Bosch. Ampace was the first to mass-produce the tabless 21700 and has entered the supply chains of TTI, Stanley Black & Decker, and Bosch. The cordless revolution has moved Chinese cell makers from "following" to "leading"—an important step in China's power tool industrial chain extending upstream toward core components.
The second opportunity lies in finished tools. The window of the cordless transition gave Chinese brands a chance to "reshuffle the deck." The corded-era landscape was entrenched (dominated by century-old brands such as Bosch and Makita); the cordless transition redefined the product, and firms that seized the trend could overtake on the curve. TTI put forward a "cordless domination" strategy, betting fully on cordless, and Milwaukee's cordless tools have grown at double-digit rates year after year; Chervon's EGO, using a high-voltage 56V platform, achieved a leading position in North America within the cordless transition of outdoor power equipment. The cordless revolution became a key window for Chinese forces (TTI, EGO) to rise in the power tool industry.
The deepest impact of the cordless revolution is that it turned power tools from a "mechanical product" into a composite "electronics + mechanics + energy" product. A corded tool is essentially a mechanical product (a motor plus a working head); a cordless tool is a composite of mechanics (motor, transmission), electronics (electronic control, intelligence), and energy (battery, charging). This shift greatly broadened the dimensions of competition in power tools—it is no longer just about mechanics, but also about batteries, electronic control, and intelligence. And it is precisely in these new dimensions that China has an advantage—China has a deep industrial foundation in lithium batteries, power electronics, and intelligent control (thanks to the pull of industries such as new energy vehicles and consumer electronics), and these advantages can spill over into power tools. The cordless revolution allows China's power tool industry to leverage China's overall strength in lithium batteries and electronics to catch up with the traditional giants.
The cordless revolution is still deepening. From tools to outdoor power equipment (the cordless transition of lawn mowers and chainsaws), from consumer-grade to professional-grade (Milwaukee's MX FUEL using a battery platform to replace small gasoline equipment), from a single tool to an entire platform ecosystem—the boundaries of the cordless transition keep expanding. And in this ever-expanding cordless world, the core competitive weapon is not any single tool, but the "battery platform"—one battery that works across hundreds of tools, binding the user tightly. How battery platformization becomes a moat for power tool companies is the subject of the next chapter.
XV. The Ledger of Cordless: The User Economics Behind Penetration Rates
Behind the numbers of the cordless transition (the global 65% in 2024) lies a ledger about user behavior and business models. Only by understanding this ledger can one see why the cordless revolution is irreversible, and how it reshaped the user economics of power tools.
Start with the penetration curve. The global cordless penetration rate of power tools rose from about 42% in 2016 to about 47% in 2020, and then to about 65% in 2024—penetration is accelerating. From 2020 to 2025, the market size of cordless products grew at an average annual rate of about 9.9%, far higher than the 2.1% for corded products. More than 69% of professional contractors in the United States now prioritize cordless tools over corded. And within the batteries of cordless tools, lithium batteries account for more than ninety percent. This penetration curve is the evidence that the cordless revolution is irreversible—once users taste the convenience of cordless, it is hard to go back to the constraints of the cord.
The deeper reason the cordless transition is irreversible is a shift in user economics. For users, cordless tools may be more expensive (you have to buy batteries), but the gains in convenience and efficiency are worth the price. Professional workers no longer have to drag around cords and hunt for sockets; they can work anywhere and move flexibly—the gain in efficiency is real money. DIY users no longer have to worry about whether the cord is long enough or whether there is a socket; they can just pick up the tool and use it—the gain in convenience is a real experience. This "value of convenience and efficiency" exceeds the premium of cordless tools—so users are willing to pay for cordless, and the cordless transition advances irreversibly.
The cordless transition also changed users' purchasing behavior—from "buying a single tool" to "buying a platform ecosystem." In the corded era, buying a tool was a one-off—you bought a drill, used it, and that was that. In the cordless era, what users buy is a "platform"—having bought a first M18 or ONE+ tool (battery included), they enter that platform, and thereafter they keep buying tools from the same platform (sharing batteries, at lower cost). This shift from a "single purchase" to "continuous repeat purchases" is the deepest change the cordless revolution brought to user economics—it turned power tools from a "one-off hardware business" into a "continuous repeat-purchase platform business." The battery-platform lock-in discussed earlier is, in essence, the commercialization of this shift in user economics.
The cordless ledger offers three layers of opportunity for China's power tools. The first layer is market expansion. The cordless transition expanded power tools from "professional plug-in equipment" to "portable tools that anyone can use," greatly enlarging the market—especially since China's cordless penetration rate (about 50%) is still below the global level (65%), the room for the cordless transition is enormous. Market expansion is a direct volume opportunity for China's power tools (the output champion). The second layer is value enhancement. Cordless tools carry a higher unit price than corded tools (batteries included), and the cordless transition has raised the average unit price and value of power tools—this is an opportunity for China's power tools to upgrade from "volume" to "value." The third layer is industrial-chain extension. The cordless transition introduced a new link, the battery, and China has an industrial-chain advantage in lithium batteries (cells, battery packs)—the cordless transition extends China's power tool industrial chain toward batteries, adding value and autonomy.
But the cordless ledger also poses a challenge for China's power tools. The biggest challenge is "building the platform ecosystem." The user economics of the cordless transition (from a single purchase to platform repeat purchases) mean that whoever builds the platform ecosystem locks in users and wins continuous repeat purchases. Building a platform requires a complete product lineup, a user base, and time to accumulate—these are the advantages of leading firms (TTI's M18/ONE+, EGO's 56V), while a large number of Chinese small and medium-sized firms remain stuck at the "selling a single tool" stage, with no platform and no way to lock in users. The user economics of the cordless transition objectively accelerate the industry's concentration toward players with platforms—the winners with platforms take all, while those without platforms are trapped in the price wars of one-off transactions.
The cordless ledger also reveals an ultimate commercial logic of the power tool industry—"installed base + repeat purchase." Like printers (sell the body, profit from the ink) and razors (sell the handle, profit from the blades), power tools in the cordless era have also become a business of "selling the platform entry point (the first tool with a battery) and profiting from subsequent repeat purchases (tools and batteries on the same platform)." Whoever has a larger platform installed base and more user repeat purchases can keep making money. TTI's cordless domination strategy and Milwaukee's year-after-year double-digit growth are driven precisely by the continuous repeat purchases from the M18 platform's massive installed base. This logic of "installed base + repeat purchase" is the most core business model of power tools in the cordless era, and it is the commercial wisdom that China's power tools must master to move from "big" to "strong."
The cordless ledger is the key to understanding the cordless revolution and the user economics of power tools. It tells us that the cordless transition is not merely a technological upgrade (from corded to cordless), but a revolution in the business model (from a one-off hardware transaction to a platform repeat-purchase business). This revolution upgraded competition in power tools from "selling tools" to "building platforms, locking in users, and profiting from repeat purchases." For China's power tools to move from "big" to "strong," it is not enough to seize the market expansion (the volume opportunity) and value enhancement (the value opportunity) of the cordless transition; they must also master its user economics (the commercial logic of building platforms, locking in users, and profiting from repeat purchases). When Chinese power tool companies not only make cordless tools but can also build platform ecosystems that lock in users and drive continuous repeat purchases, they will have mastered the most core business model of power tools in the cordless era—moving from the "bigness" of selling tools to the "strength" of building ecosystems.
XVI. The Battery Platform: One Battery Locks In One User
The sharpest competitive weapon of the cordless era is not any single tool, but the "battery platform"—one battery that can work across hundreds of tools, locking users firmly into a single brand's ecosystem. Only by understanding battery platformization can one understand the deepest moat in the power tool industry, and why users, once "hooked," find it so hard to switch brands.
First, understand what a battery platform is. Traditionally, each power tool came with its own battery, and switching tools meant switching batteries. Platformization changed this logic—a brand launches a battery platform of a unified specification (say, 18V or 56V), and this platform's batteries can work across hundreds of tools under that brand: drills, angle grinders, saws, blowers, and even lights, fans, and speakers. After buying the first tool (battery included), when the user buys other tools on the same platform, they only need to buy the "bare tool" (without battery) and share the batteries they already own—this greatly lowers the cost of subsequent purchases, and the more the user buys, the harder it becomes to leave the platform.
The power of platformization becomes clear when you look at a few leading platforms. Milwaukee's M18 platform is compatible with more than 300 tools, all sharing the same slide-on battery; the accompanying ONE-KEY digital management system can also track tools, deter theft, and customize parameters—third-party batteries show up as "unknown" in ONE-KEY and cannot be read, using the digital ecosystem to lock in genuine products. Ryobi's ONE+ platform (18V) has more than 300 products, is backward-compatible with 10-year-old batteries, and even extends to hot glue guns, fans, inflators, Bluetooth speakers, and coffee makers—using "compatibility + breadth of categories" to lock in DIY users. DeWalt's FlexVolt is a dual-voltage battery (automatically switching between 20V/60V), backward-compatible with the entire 20V MAX ecosystem (more than 200 tools). Chervon's EGO 56V ARC platform offers more than three times the capacity of a competitor's 18V battery at the same size, extending from consumer to commercial lines. Each of these platforms is compatible with hundreds of tools—and that is the moat.
Why is the battery platform the deepest moat? Because it creates extremely high "switching costs" and "repeat-purchase stickiness." Switching costs—once a user has bought a platform's tools and batteries, they are "locked" into that platform: switching brands means writing off all existing batteries, chargers, and tools and buying a whole new set at high cost. So users rarely switch brands—this is the "lock-in" that platformization creates. Repeat-purchase stickiness—the more a user buys within the same platform (because batteries are shared and costs are low), the deeper their dependence on the platform, until they become "captives of repeat purchase." The battery becomes a dual moat of "consumable-style repeat purchase + switching cost"—just like a razor's blades or a printer's ink cartridges, once you have used a brand's body, you have to keep buying its consumables. TTI's "cordless domination" strategy and Milwaukee's year-after-year double-digit growth are driven precisely by continuous repeat purchases from the massive user base locked into the M18 platform.
The lessons this moat offers China's power tools are profound. It reveals a truth—in the cordless era, the core of competition is not the performance of a single tool, but the building of a "platform ecosystem." Whoever can build a battery platform that is compatible with hundreds of tools and locks in a massive user base can stand invincible in the cordless era. And building a platform requires three conditions: a wide enough range of tool categories (so the battery has ample use), a large enough user base (so the platform has scale effects), and a long enough time (so users get "hooked" and accumulate). None of these three conditions can be built overnight—which is also why leading platforms (M18, ONE+, FlexVolt), once established, are so hard to overturn.
China's power tools show a clear divergence in their progress on battery platforms. The leading, branded firms have already built their own platforms—TTI's M18 and ONE+ (though American brands, they have Chinese capital backing and are made in China), and Chervon EGO's 56V ARC (a global platform of a pure Chinese firm). These platforms have built moats in their respective markets (professional-grade, DIY, OPE). But a large number of China's small and medium-sized power tool firms remain stuck at the "selling a single tool" stage, without their own battery platforms—they make tools but have no ecosystem to lock in users, and can only compete on price in the mid- and low-end markets. This divergence is consistent with the overall pattern of China's power tools—"the head climbing, the tail churning": leading firms build moats through platforms, while small and medium-sized firms are trapped in platform-less price wars.
Battery platformization also reminds China's power tools that moving from "big" to "strong" cannot rely on making tools alone; it also requires building ecosystems. Making tools is "big" (output, scale); building ecosystems (battery platforms, digital management, user lock-in) is "strong" (moats, stickiness, premium). China's leading power tool firms (TTI, EGO) already understand this and have built their own platform ecosystems; more Chinese firms need to shift from "selling tools" to "building ecosystems." When China's power tools not only make sixty to eighty percent of the world's tools but can also build battery-platform ecosystems that lock in global users, they will be upgraded from the "world's factory" to an "ecosystem leader," moving from "big" to "strong." This upgrade from tools to ecosystems is the most important strategic issue for China's power tools in the cordless era. And the energy core underpinning the battery platform that supports this upgrade is the battery cell—the very link where China is rapidly displacing Japan and Korea.
XVII. The Platform Wars: The Business Logic of M18, ONE+, and 56V
Competition in the cordless era is, in essence, a war of battery platforms. M18, ONE+, 20V MAX, 56V—these platforms are not just technical specifications, but carefully designed business logics. By breaking down and comparing the tactics of the major platforms, one can grasp the deepest commercial wisdom of the power tool industry, and see clearly why the Chinese brand EGO's platform strategy has succeeded.
Milwaukee M18—deep binding of the professional grade. Milwaukee's M18 platform (18V) is compatible with more than 300 tools, targeting professional workers. Its business logic is "deeply binding professional users"—professional workers need a full set of tools (drilling, sawing, grinding, cutting), and M18 lets them equip all their tools with a single battery platform, buying more and more and binding deeper and deeper. Even more ruthless is the accompanying ONE-KEY digital system—tool location, theft deterrence, and parameter customization, with third-party batteries showing up as "unknown" in the system—using the digital ecosystem to lock out anything but genuine products. M18's tactic is "complete category range + digital lock-in," binding professional users tightly into the Milwaukee ecosystem. This is the source of TTI's high margins—once professional users are hooked on M18, they keep repurchasing Milwaukee's tools and batteries.
Ryobi ONE+—the breadth temptation of DIY. Ryobi's ONE+ platform (18V) has more than 300 products, targeting DIY consumers. Its business logic differs from M18's—"tempting ordinary users with breadth of categories." ONE+ has not only tools but also extends to hot glue guns, fans, inflators, Bluetooth speakers, and even coffee makers—it extends the "battery platform" from tools into daily life, making DIY users feel that "having bought a ONE+ battery, I can use it on hundreds of things." Moreover, ONE+ is backward-compatible with 10-year-old batteries—users' old batteries always work, lowering the worry about continued purchases. ONE+'s tactic is "breadth of categories + backward compatibility," using the temptation of "one battery for everything" to lock in DIY users. This is the secret behind Ryobi's dominance in the DIY market (especially through the Home Depot channel).
DeWalt FlexVolt—the cleverness of dual voltage. DeWalt's FlexVolt is a dual-voltage battery (automatically switching between 20V/60V), backward-compatible with the entire 20V MAX ecosystem (more than 200 tools). Its business logic is "using compatibility to resolve the high-low voltage split"—high-voltage tools (60V) need a large voltage, but what users already own is the 20V platform, and FlexVolt lets one battery power both the 60V big tools and the 20V small tools, sparing users from buying a separate platform for high-voltage tools. This is a clever combination of technical and commercial design—keeping the high-voltage product line from splitting off from the mainstream platform, and protecting users' existing 20V investment.
EGO 56V—the high-voltage advantage of OPE. Chervon EGO's 56V ARC platform targets outdoor power equipment (OPE). Its business logic is "using high voltage to match high-power outdoor equipment"—OPE such as lawn mowers and chainsaws needs more power than handheld tools, and the high-voltage 56V platform matches this perfectly. At the same size, a 56V battery offers more than three times the capacity of a competitor's 18V—this high-voltage advantage gave EGO the technological high ground in the cordless transition of OPE. EGO also extended from the consumer grade into a commercial line (EGO Commercial), expanding the 56V platform from household use to commercial lawn-care crews. EGO's success proves that Chinese brands can not only follow, but can design leading platform strategies aimed at new tracks (OPE).
Comparing the four major platforms reveals the core business logic of the battery platform wars. First, the platform is a tool for "locking in users"—whether M18's deep binding, ONE+'s breadth temptation, FlexVolt's compatibility protection, or 56V's high-voltage advantage, the essence is to lock users into one's own ecosystem, creating switching costs and repeat-purchase stickiness. Second, the platform must be "designed for the target user"—M18 targets professional workers (complete category range + digital lock-in), ONE+ targets DIY (breadth of categories + backward compatibility), FlexVolt targets high-low voltage compatibility needs, and 56V targets OPE high power—different target users need different platform strategies. Third, the platform is a "long-term moat"—once users are hooked and the ecosystem is built, the platform becomes very hard to overturn, turning into a money-printing machine of continuous repeat purchases.
The success of EGO's platform strategy offers China's power tools an important lesson—on new tracks, Chinese brands can design leading platforms in a targeted way and overtake on the curve. EGO did not slug it out with M18 and ONE+ in the red ocean of handheld tools; instead, it targeted the new track of OPE, designed the high-voltage 56V platform, seized the technological high ground of the OPE cordless transition, and became a leader in North American OPE. This is the wisdom of "new track + targeted platform design"—not slugging it out in old platform wars that others dominate, but designing one's own leading platform on a new track.
The deepest lesson of the platform wars is that for China's power tools to move from "big" to "strong," making tools alone is not enough; they must also build platforms. Making tools is "big" (output); building platforms is "strong" (moats, stickiness, ecosystems). China's leading power tool firms (TTI's M18/ONE+, Chervon's 56V) already understand this and have built their own platform ecosystems; more Chinese firms remain stuck at the "selling a single tool" stage. When China's power tools not only make sixty to eighty percent of the world's tools but can also build battery-platform ecosystems that lock in global users, they will be upgraded from the "world's factory" to an "ecosystem leader." The platform wars are the core of power tool competition in the cordless era, and a war that China's power tools must win to move from "big" to "strong."
XVIII. OPE Electrification: Chinese Brands Overtaking on the Curve
If, on the main track of power tools (drilling, sawing, grinding), China is still catching up to European, American, and Japanese brands, then on an emerging adjacent track—the electrification of outdoor power equipment (OPE)—Chinese brands have already overtaken on the curve, even reaching the top of the North American market. This is the most successful breakthrough in China's power tools moving from "big" to "strong."
First, understand what OPE is. OPE (Outdoor Power Equipment) refers to outdoor working machinery such as lawn mowers, chainsaws, snow blowers, and hedge trimmers. Traditionally, these devices burned gasoline (driven by internal combustion engines), which was loud, high-emission, and troublesome to maintain. As lithium batteries have matured, OPE is undergoing electrification—moving from burning gasoline to running on lithium batteries. This electrification created a brand-new track with an undecided landscape, giving Chinese brands a chance to overtake on the curve.
Chinese brands' record in the North American OPE market has been dazzling. In the fourth quarter of 2025, North American OPE brand shares stood as follows: Ryobi led with a 23.9% unit share, EGO held firmly at the top with a dollar share of about 14.9%, and Greenworks was strong in the mid-to-high price band and on the Amazon channel—the top three are all Chinese-capital platform brands (Ryobi belongs to TTI, EGO to Chervon, and Greenworks to Greenworks). In the U.S. lithium-battery lawn mower market, unit sales exceeded 3.6 million in 2024 and are projected to exceed 4.2 million by 2027, with electric (including corded and lithium-battery) already accounting for about 45% of the U.S. power lawn mower market. Chinese brands have not only participated in OPE electrification but led it—in North America, the core market of OPE, Chinese brands have captured the leading shares.
Why can Chinese brands overtake on the curve in OPE? Several reasons. First, a new track with an undecided landscape. OPE electrification is a new track—traditional gasoline OPE is dominated by brands such as Husqvarna and Stihl, but electric OPE is an entirely new battlefield, where Chinese brands and traditional brands stand at the same starting line, and Chinese brands even hold a head start thanks to their accumulation in lithium-battery and cordless technology. Second, the industrial-chain advantage in lithium batteries and motors. The core of OPE electrification is lithium batteries and motors—and China has a deep industrial foundation in these two fields (thanks to the pull of new energy vehicles and power tools). Chinese brands can leverage this industrial-chain advantage to quickly roll out high-performance, high-value-for-money electric OPE. Third, policy tailwinds. Starting in 2024, California banned the sale of new gasoline small off-road engine (SORE) lawn-and-garden equipment (lawn mowers, leaf blowers, etc.), and manufacturers view this as an opportunity for nationwide electrification—policy accelerated OPE electrification and gave Chinese brands more market space. Both EGO and Greenworks have specifically launched compliant product lines.
The most exciting extension of OPE electrification is the robotic lawn mower—an exploding new hot spot. The robotic lawn mower is the product of OPE electrification plus intelligence; it can mow autonomously (like a robotic vacuum) and represents the high-end intelligent form of OPE. This market was about $2.4 billion in 2025 and is projected to reach $5.32 billion by 2031 (an average annual growth of 14.18%); moreover, the technology is upgrading from the buried-wire type (which requires pre-laid boundary wires) to the boundary-wire-free type (autonomous navigation using RTK, vision, and LiDAR). On this new hot spot, Chinese firms are almost the leaders: Segway-Ninebot's revenue grew 76% in the first half of 2025, its robotic lawn mower business generated ¥895 million in revenue in 2024 with a gross margin above 51%, and by the end of March 2025 it became the world's first boundary-wire-free robotic lawn mower brand to surpass 170,000 household users, also partnering with America's Lowe's. Mammotion (whose founding team came from DJI), owned by Agilex, sold about 30,000 units in Europe and North America in 2024, with its LUBA 2 single product selling over $4 million per month and topping the world in boundary-wire-free robotic lawn mower sales revenue. Ecovacs's GOAT saw overseas revenue grow 186.7% in 2024, breaking through a 12% market share in Europe. Chinese brands' intelligent robotic lawn mowers sold more than 300,000 units combined in 2024, capturing more than 30% of the global share, with exports of $1.01 billion in the first quarter of 2025, up nearly 60%. Capital is also chasing the field—about 8 robotic lawn mower firms secured financing in 2025, with the track raising more than ¥1.6 billion in half a year.
The success of OPE electrification and robotic lawn mowers offers China's power tools (and indeed Chinese manufacturing) a valuable lesson—to overtake on the curve, choose a new track. On the traditional main track (drilling, sawing, grinding), China is still catching up to century-old European, American, and Japanese brands, because the landscape is already entrenched and the brand barriers are formidable; but on new tracks (OPE electrification, robotic lawn mowers), the landscape is undecided and there is no baggage of century-old brands, so Chinese brands can leverage their industrial-chain advantages (lithium batteries, motors, intelligence) to overtake on the curve, even achieving global leadership. This is the wisdom of "changing tracks to overtake"—not slugging it out on old tracks that others dominate, but seizing position early on emerging tracks with undecided landscapes. Photovoltaics, power batteries, and new energy vehicles—many of Chinese manufacturing's comebacks follow this logic; OPE electrification and robotic lawn mowers are yet another successful rendition of this logic in a field adjacent to power tools.
OPE electrification and robotic lawn mowers are the most dazzling breakthrough in China's power tools moving from "big" to "strong." They prove that Chinese brands can not only catch up on the main track but lead on new tracks; not only make tools but make world-leading intelligent products (robotic lawn mowers). This breakthrough offers a successful template for the brand climb of China's power tools—using new tracks, new technologies, and new products to leap from following to leading. And what supports these breakthroughs is the individual operations and strategies of China's power tool companies—the 2025 to 2026 financial reports reveal their true circumstances, uneven between warmth and cold.
XIX. Robotic Lawn Mowers: A Chinese Corps on a New Hot Spot
Within OPE electrification, the most exciting—and the most representative of Chinese manufacturing overtaking on the curve—is the robotic lawn mower, an exploding new hot spot on which Chinese firms are almost the leaders. Going through this "Chinese corps" one by one, one can feel the explosive power of Chinese manufacturing on new tracks.
First, see how big and how fast this hot spot is. The robotic lawn mower market was about $2.4 billion in 2025 and is projected to reach $5.32 billion by 2031 (an average annual growth of 14.18%). More critical is the generational upgrade in technology—in 2025 the buried-wire type (which requires pre-laid boundary wires) still accounted for about 65%, but the boundary-wire-free type (autonomous navigation using RTK, vision, UWB, and LiDAR) is rapidly displacing it at an average annual growth rate of about 18.9%. Going boundary-wire-free is the technological revolution of robotic lawn mowers—it turns the robotic lawn mower from "needing laborious wire-laying" into "ready to use out of the box, navigating autonomously," greatly lowering the barrier to use and opening up the mass market. And it is precisely in this boundary-wire-free technological revolution that Chinese firms have seized the head start.
Segway-Ninebot—world No. 1 in household users. Segway-Ninebot (689009) saw revenue grow 76% in the first half of 2025, and its robotic lawn mower business generated ¥895 million in revenue in 2024 with a gross margin above 51% (far above the power tool industry average). By the end of March 2025, it became the world's first boundary-wire-free robotic lawn mower brand to surpass 170,000 household users, also partnering with the U.S. retail giant Lowe's and stocking 300,000 units, with its flagship Navimow X3 debuting at CES 2025. Starting from self-balancing scooters and electric kick scooters, Segway-Ninebot transferred its robotics technology to mowing and became one of the world's leaders in robotic lawn mowers.
Mammotion (Agilex)—world No. 1 in sales revenue. Mammotion, owned by Agilex, has a founding team from DJI—this DNA gives it a deep accumulation in autonomous navigation, vision, and robotics technology. In 2024 Mammotion sold about 30,000 units in Europe and North America, with its LUBA 2 AWD single product selling over $4 million per month and topping its category on the North American site within one month of launch; from July 2024 to June 2025, it claimed the title of "world No. 1 in boundary-wire-free robotic lawn mower sales revenue." The DJI-lineage technological DNA made Mammotion a dark horse of the robotic lawn mower track.
Ecovacs GOAT—breaking 12% market share in Europe. Ecovacs's (the robotic vacuum leader) robotic lawn mower GOAT saw overseas revenue grow 186.7% and unit sales grow 271.7% in 2024, breaking through a 12% market share in Europe with annual sales of more than 40,000 units, and announced entry into the U.S. market in 2025. Ecovacs transferred its robotic vacuum's autonomous navigation and obstacle-avoidance technology to mowing, achieving a rapid rise.
Putting this Chinese corps together, the record is stunning—Chinese brands' intelligent robotic lawn mowers sold more than 300,000 units combined in 2024 (up more than 200% year-on-year), capturing more than 30% of the global share, with exports of $1.01 billion in the first quarter of 2025 (up nearly 60%). Capital is also chasing it frenziedly—about 8 robotic lawn mower firms secured financing in 2025, including ¥1 billion for Yuanding Intelligent and a ¥200 million Series B for Hanyang Technology, with the track raising more than ¥1.6 billion in less than half a year. On this new hot spot of robotic lawn mowers, the Chinese corps dominates comprehensively—from products to share to capital.
Why can China dominate in robotic lawn mowers? Three reasons. First, the advantage of technology transfer. The core technologies a robotic lawn mower needs—autonomous navigation (RTK, vision, LiDAR), obstacle avoidance, path planning, motors and batteries—are precisely the technologies China has accumulated in robotic vacuums, drones, new energy vehicles, and power tools. Segway-Ninebot (self-balancing scooters), Agilex (DJI lineage), and Ecovacs (robotic vacuums) all transferred existing robotics technology to mowing—this is the spillover of the overall strength of China's robotics industrial chain. Second, a new track with an undecided landscape. The robotic lawn mower is an entirely new track, on which traditional gasoline lawn mower brands (Husqvarna, Stihl) have no advantage on this intelligent new battlefield, and Chinese firms can overtake on the curve. Third, industrial-chain and cost advantages. China has a complete robotics industrial chain (motors, batteries, sensors, chips), enabling it to quickly roll out high-performance, high-value-for-money robotic lawn mowers.
But the robotic lawn mower hot spot also faces challenges. First, EU anti-dumping. In November 2025, on the complaint of Husqvarna, the EU launched an anti-dumping investigation into robotic lawn mowers originating in China—green barriers and trade remedies are extending to this new category. Second, churn within the track. With hot financing and a crowd of players (Segway-Ninebot, Agilex, Ecovacs, Dreame, Yuanding, Hanyang, and others), it may repeat the "hot first, then churning" pattern of other hot spots—after a flood of capital, price wars and homogeneous competition could crush profits. Third, fast technology iteration. Boundary-wire-free navigation technology is still iterating rapidly, and who can stay ahead is a question mark. The dividends of a new hot spot will not stay open forever.
This Chinese corps of robotic lawn mowers is the most dazzling example of China's power tools (and indeed Chinese manufacturing) moving from "big" to "strong." It proves that on new tracks with undecided landscapes, Chinese firms can leverage the advantages of the industrial chain and technology transfer to go from followers to global leaders. This logic of "overtaking on the curve on new tracks" is one of the most promising paths for Chinese manufacturing to move from "big" to "strong." Segway-Ninebot, Agilex, and Ecovacs turned the robotic lawn mower into a world-leading Chinese intelligent product, offering Chinese manufacturing a valuable experience—not slugging it out on old tracks that others dominate, but seizing position early on emerging tracks with undecided landscapes, using the advantages of technology and the industrial chain to achieve a leap. The Chinese corps of robotic lawn mowers is the most vivid rendition of this logic.
20. The Hidden Worries of Robotic Mowers: Reefs Beneath the Boom
The robotic lawn mower is the most dazzling example of China's power tools industry overtaking on the curve, yet an honest observer must point out the reefs precisely where the boom is hottest. Beneath the glamour of this explosive new track lie several pitfalls.
The first reef is the EU anti-dumping case. In November 2025, in response to a complaint filed by Husqvarna, the EU formally opened an anti-dumping investigation into robotic mowers originating in China, with the dumping investigation period running from October 2024 to September 2025 and a preliminary ruling expected between June and July 2026. The case involves China's leading brands including Segway (Ninebot), Ecovacs, Roborock, and Anker. This is an extension of green barriers and trade remedies into the new product category of robotic mowers—just as tires and power tools have run into anti-dumping and anti-subsidy actions, once robotic mowers grow big and strong they will invite trade remedies. The EU anti-dumping case could deliver a tariff shock to the European market for Chinese robotic mowers (Ecovacs holds a 12% market share in Europe). The hotter the boom, the more likely it is to attract trade protection.
The second reef is intra-track involution. Financing for robotic mowers is red-hot—around eight companies raised funds in 2025, with financing in the track exceeding 1.6 billion yuan in half a year. The frenzied inflow of capital and the rapid proliferation of players (Segway/Ninebot, Songling, Ecovacs, Dreame, Yuanding, Hanyang, and others) could replay the "hot first, then involuted" script of other booms. After large volumes of capital and players pour in, price wars and homogeneous competition could crush profits—just as robot vacuums, shared bikes, and even solar PV and lithium batteries all went through the cycle of "boom overheating—overcapacity—price war—shakeout." Robotic mowers still have very high gross margins today (Segway/Ninebot's robotic mower gross margin exceeds 51%), but if involution intensifies, how long this high margin can hold is a question mark.
The third reef is the uncertainty of technological iteration. The core technology of robotic mowers—boundaryless navigation (RTK, vision, LiDAR)—is still iterating rapidly. Who can maintain a sustained lead is an unknown. The companies leading today (Segway/Ninebot, Songling), if they fall behind on the next generation of technology, could be overtaken by later entrants. In a track where technology iterates quickly, the first-mover advantage is not secure—this is a risk common to all high-tech new tracks. China's robotic mower corps needs continuous innovation to hold its lead.
The fourth reef is the ceiling on market penetration. Although robotic mowers are growing fast, penetration is still very low (about 5%)—they mainly target European and American households with lawns, and the market size is limited (about 2.4 billion US dollars in 2025). Although it is projected to reach 5.32 billion US dollars by 2031, compared with the entire power tools market (tens of billions of US dollars) or the OPE market, robotic mowers remain a relatively niche segment. It is a high-growth market but one whose ceiling is not especially high—China's corps holds a lead here of high value (technology, brand), but its contribution to the entire Chinese power tools industry is limited in magnitude.
These reefs remind us to view robotic mowers' overtaking on the curve rationally. It truly is a dazzling example of Chinese power tools (and indeed Chinese manufacturing) overtaking on the curve in a new track—Chinese firms used technology transfer and supply-chain advantages to achieve global dominance in the new track of robotic mowers. But it also faces multiple challenges: trade remedies (the EU anti-dumping case), intra-track involution (financing overheating), technological iteration (an insecure first-mover position), and a market ceiling (low penetration). There are reefs beneath the boom, and the dividends of overtaking on the curve will not stay open forever.
The hidden worries of robotic mowers also reveal a general pattern in Chinese manufacturing's "overtaking on the curve"—the dividends of a new track are transient and will be eroded by catch-up and involution. China has overtaken on the curve in many new tracks (solar PV, lithium batteries, new-energy vehicles, robotic mowers), initially taking a fast lead through technology transfer and supply-chain advantages; but as the track matures, it encounters trade protection (anti-dumping by other countries), involution (price wars among domestic players), and technological iteration (dilution of the first-mover advantage)—the dividends of overtaking on the curve narrow step by step amid these challenges. So overtaking on the curve is not a once-and-for-all victory, but a long-term battle that requires continuous innovation, sustained leadership, and coping with trade and involution challenges.
For China's robotic mower corps, the keys to going from "overtaking on the curve" to "lasting leadership" come down to several things. First, continuous technological innovation—maintaining a lead in core technologies such as boundaryless navigation to avoid being overtaken by later entrants. Second, brand building—turning a technological lead into brand trust (the brands of Segway/Ninebot, Songling, Ecovacs) and building a moat beyond price. Third, coping with trade protection—addressing trade remedies such as the EU anti-dumping case through overseas footprint, compliance, and diversified markets. Fourth, avoiding vicious involution—the industry needs to shift from "burning financing to grab share" to "healthy competition on technology and brand," avoiding a rerun of the price-war tragedy.
This new boom in robotic mowers is both the hope of China's power tools overtaking on the curve and a mirror—it reflects both the explosive force of Chinese manufacturing's overtaking (rapidly dominating a new track) and the fragility of overtaking (the challenges of trade protection, involution, and technological iteration). Whether Chinese robotic mowers can turn from "a bright spot of overtaking on the curve" into "an industry with lasting leadership" depends on whether they can keep innovating, build brands, cope with trade protection, and avoid vicious involution. The reefs beneath the boom must be faced squarely—only by steering around these reefs can the overtaking on the curve in robotic mowers move from a momentary lead to a solid pillar in Chinese power tools' journey from "big" to "strong."
21. Ice and Fire in the Financial Reports: TTI's Record High Against the Tide and Chervon's Growing Pains
The 2026 reporting season laid China's power tools companies' 2025 circumstances out on paper. Like tires, the most striking feature of this scorecard is divergence—facing the same tariff roller coaster, some hit record highs against the tide while others saw both revenue and net profit fall. This "ice and fire" reveals the survival logic of the industry under the tariff siege.
The fire side: TTI hitting a record high against the tide, and steady Great Star. Techtronic Industries (TTI) is the most dazzling example: 2025 revenue of 15.3 billion US dollars, up 4.4% to a record, net profit of 1.198 billion US dollars, up 6.8%, and a gross margin as high as 41.2%—setting a new gross-margin record against the tide in a tariff year. Its secret is "a rising share of high-margin Milwaukee + diversified global production sites + tariff-mitigation measures." In the second half of 2025, Milwaukee even proactively suspended sales of some products hardest hit by tariffs and relocated these products to low-tariff production sites before year-end; the company said this impact would not recur in 2026—this kind of flexible response is the confidence that comes from diversified production sites. Great Star Tools (mainly hand tools, with power tools as its second growth curve) posted 2025 revenue of 14.666 billion yuan, down a slight 0.87%, but net profit attributable to the parent of 2.510 billion yuan, up 8.95%; within this, the power tools business reached 1.762 billion yuan, up 22.55% (the only high-growth segment)—Great Star preserved its net-profit growth through price increases and Southeast Asian capacity.
The ice side: Chervon's growing pains and losses at Greenworks and Ken Holding. Chervon Holdings is the most typical example of growing pains: 2025 revenue of 1.6278 billion US dollars, down 8.2%, and net profit down 13.3%, which the company attributed to demand contraction caused by China-US tariff tensions. Its problem is over-reliance on the US (US revenue accounts for about 77%, the highest among the 30 Chinese stocks analyzed by Morgan Stanley) plus the transitional growing pains of relocating production—net profit still grew 54.6% in the first half of 2025, but tariffs in the second half nearly swallowed all profit. Greenworks posted 2025 revenue of 5.056 billion yuan, down 6.82%, and a net loss attributable to the parent of 355 million yuan (swinging from profit to loss year-on-year)—selling expenses grew 34.9% against the tide (brand investment plus coping with tariffs), dragging down profit; however, it turned around in the first quarter of 2026 (revenue up 22.61%, net profit attributable to the parent of 136 million yuan). Ken Holding (a professional-grade domestic brand) saw 2025 revenue grow 12.21%, but a net loss attributable to the parent of 45.519 million yuan (loss widening by 136%)—rising raw-material prices and rising expenses dragged down this listed Chinese professional-power-tool play.
Why "ice and fire"? The key is still "global capacity layout" and "degree of reliance on the US." TTI's production sites span China, Vietnam, the US, Mexico, and Europe, allowing it to flexibly respond to tariffs and even proactively adjust products and production sites, so it hit a record high against the tide. Chervon relies on the US for 77%, has relatively concentrated production sites, and is still in the relocation transition, so it was badly hurt by tariffs. This contrast follows the same logic as the tire industry's "leaders with overseas capacity holding up while single-site second-tier players are halved"—on the tariff roller coaster, "the diversity and flexibility of global capacity layout" is the most important survival capability. Companies with diversified production sites (TTI, Great Star) stand rock-solid, while those with single sites and over-reliance on the US (Chervon, Greenworks) are battered all over.
The reporting season also revealed several structural signals. First, the brand power of Milwaukee and EGO. TTI's Milwaukee has grown at double digits for years, and Chervon's EGO leads in North American OPE—products with brand power can keep growing even in a tariff year, which is the value of the brand premium. Second, Dongcheng's steady domestic sales. Dongcheng posted 2025 sales of 6.865 billion yuan (5.486 billion domestic, including 2.502 billion in lithium-battery products), ranking No. 1 in China power tools sales for 12 consecutive years—the domestic market is a steady base for Chinese brands, relatively insulated from tariff shocks. Third, Positec's capital operations. Positec (WORX) completed its first funding round of over 250 million US dollars in 2025 (its first external financing in 31 years since founding); WORX robotic mowers have cumulative sales exceeding one million units and rank first in GfK all-channel share—capital is now backing the leaders of Chinese power tools.
The Chinese power tools industry that this "ice and fire" reveals is one undergoing violent divergence. Leading, branded companies with global capacity layouts (TTI, Great Star, Dongcheng, Positec) held steady or even grew in a tariff year; while companies over-reliant on the US, with single production sites and lacking brands (Chervon's growing pains, the losses at Greenworks and Ken Holding), were hurt under the tariff shock. This divergence is consistent with tires and with much of Chinese manufacturing—the tariff roller coaster, cost pressure, and intensifying competition are accelerating the concentration of Chinese power tools toward the leaders, with the strong growing stronger and the weak being cleared out.
Understanding this divergence is understanding the path of Chinese power tools from "big" to "strong"—it is not "everyone does well together," but "the leaders climb, the tail is cleared out." Leading companies with brands, global footprints, and technology are emerging from this "big but not strong" industry and climbing toward "strong"; while small and medium companies lacking these are being eliminated under the dual pressure of tariffs and competition. The financial-report "ice and fire" is the most honest record of this divergence and shakeout. And driving this shakeout, besides tariffs and competition, is the US retail channel landscape—the key link that decides whether Chinese power tools can be sold at all.
22. The 2026 Outlook: Repair, Rate Cuts, and the Overseas Inflection Point
Looking back from the middle of 2026, China's power tools industry faces a macro environment dense with variables—tariffs have just been through a roller coaster, the US real estate and DIY market has yet to recover, rate cuts are brewing, and overseas capacity is ramping up. The combination of these variables determines the near-term fate of Chinese power tools in 2026. The judgments of brokerages and the market provide a coordinate for the industry's near-term direction.
First, look at the signals of repair. In the first quarter of 2026, a batch of Chinese tools companies showed signs of repair: Great Star Tools revenue up 3.18%, net profit attributable to the parent up 11.87%, with an improved gross margin; Greenworks revenue up 22.61%, net profit attributable to the parent of 136 million yuan, turning around in a single quarter. Brokerages framed Great Star as "short-term disturbances gradually clearing out, with a 2026 earnings repair to be expected." After the most severe phase of the tariff roller coaster (2025) passed, 2026 is more a year of "repair"—the Supreme Court overturned some tariffs, companies' capacity relocation is gradually falling into place, cost pressure has eased somewhat, and earnings are beginning to stabilize and repair.
Now look at several key variables. First, tariffs. In February 2026 the Supreme Court overturned the IEEPA tariffs, bringing the effective tariff rate on Chinese goods to the US down to about 21.2%—a short-term positive. But the Section 301 tariffs (including 25% on lithium batteries) remain, and future tariffs still carry uncertainty. Overseas capacity layout remains the fundamental solution for navigating tariffs. Second, rate cuts. The Federal Reserve paused rate cuts in the first half of 2026 (holding steady for a fourth consecutive time), while the US real estate and DIY market has yet to fully recover—this is a drag on export demand for Chinese power tools. The market broadly expects a resumption of rate cuts to stimulate US real estate and DIY consumption, thereby pulling power tools demand—the pace of rate cuts is an important catalyst for overseas demand. Third, the US real estate and DIY cycle. In the first half of 2026, comparable sales at Home Depot and Lowe's grew only 0.6%, the DIY customer base remained under pressure, but the tools category outperformed the broader market and the professional (Pro) end showed strong resilience. US DIY has yet to recover fully, but tools demand is relatively healthy—the catalyst for recovery is a resumption of rate cuts plus a real estate rebound.
Brokerages' core judgment for 2026 can be summarized as "accelerated overseas expansion + earnings repair." Leading companies with overseas capacity layouts (TTI's five-country production sites, Great Star's Southeast Asian capacity, Chervon's 70% in Vietnam) can navigate tariffs and contribute profit elasticity; while companies over-reliant on the US with single sites remain under pressure. The bullish logic of brokerages is that in 2026 overseas capacity ramp-up will offset tariffs, the most severe phase of the tariff roller coaster has passed, and rate cuts will stimulate overseas demand, so Chinese tools companies' earnings are likely to repair. Great Star's institutional target price, and the expected profit release after Chervon's capacity relocation—all rest on this judgment of "accelerated overseas expansion + earnings repair."
But the outlook also carries risks and uncertainties. First, rate cuts fail to arrive. If the Fed keeps pausing rate cuts and US real estate and DIY stay sluggish, export demand for Chinese power tools will stay under pressure—the earnings repair could fall through. Second, tariffs return. The Supreme Court overturned the IEEPA tariffs, but Trump switched to signing new tariffs under Section 122; whether tariffs will return in some other form remains a suspense—the uncertainty over tariffs has not been eliminated. Third, the transitional growing pains of capacity relocation. Companies such as Chervon are still in the capacity-relocation transition, and short-term earnings remain dragged down—until relocation is complete, the growing pains will persist. Fourth, the EU anti-dumping case in new tracks such as robotic mowers—the dividends of new tracks face the challenge of trade remedies.
Combining these variables, the picture for Chinese power tools in 2026 is—repair in the first half, watch for rate cuts in the second half. With the most severe phase of the tariff roller coaster past, 2026 is a year of "repair," with leading companies' earnings stabilizing; but a full recovery depends on a resumption of rate cuts and a rebound in US real estate and DIY, which takes time. So 2026 is more likely a year of "repair first, then watch for catalysts," with the dividends most likely concentrated in the leading companies that have completed their overseas capacity layout.
The 2026 outlook also reveals a long-term trend for Chinese power tools—the industry's fate increasingly depends on "globalization capability" and "brand power." In the complex environment of tariff siege and demand fluctuation, only leading companies that can flexibly deploy capacity across multiple global markets, are supported by brand power (Milwaukee, EGO), and can navigate cycles can win earnings elasticity; while companies stuck in a single production site and lacking brands will stay under the dual pressure of tariffs and demand. Chinese power tools' second wave of globalization (diversified capacity, near-shore layout) and brand climb (TTI reaching the summit, EGO's rise) are not merely a survival strategy for the present, but the core competitiveness of the industry's future.
From repair to rate cuts to the overseas inflection point—2026 is a transition year and a repair year for China's power tools industry. It carries the aftershocks of the 2025 tariff roller coaster and also gestates a possible recovery in the second half of 2026. And those who navigate this transition year and seize the opportunities of repair and recovery are the leading companies with global footprints, brand power, and supply-chain support. They are emerging from this "big but not strong" industry and climbing toward "strong"—this process of emergence is the truest portrayal, at this current moment, of Chinese power tools' journey from "big" to "strong."
23. Kings of the Channel: Home Depot and the Power of the Shelf
Whether Chinese power tools can reach US consumers depends to a large extent on one link—the channel. And the channels for US power tools are held by a few giants, among which Home Depot's power is great enough to decide the life or death of a brand. Only by understanding the power of US channels can one understand the deepest gate in Chinese power tools' overseas expansion.
First, look at channel concentration. Sales of US power tools are highly concentrated in a few big channels: Home Depot (dominating US power tools sales volume), Lowe's (holding a strong position), and Walmart plus Amazon (together accounting for about a third of tracked order volume, with e-commerce power rising). These channels control the pathways by which US power tools reach consumers—a power tools brand that wants to sell in the US can hardly bypass them. Channel concentration means channel power—whoever controls the shelf controls the lifeblood of a brand.
How great is Home Depot's power? Look at its relationship with TTI and you'll understand. Home Depot is TTI's largest customer, accounting for 45.4% of TTI's revenue (2025)—nearly half of revenue comes from a single customer. TTI's Ryobi brand has had an exclusive distribution agreement with Home Depot since 2002, and Milwaukee and Ryobi have repeatedly won Home Depot's "Partner of the Year" awards (winning three at once in 2023). This deep binding is one of the keys to TTI's success—it turned Ryobi into an exclusive Home Depot brand, reaching a vast number of DIY consumers through Home Depot's massive channel. But deep binding is also a double-edged sword—with nearly half of revenue dependent on a single customer, once Home Depot's strategy changes or the relationship between the two shifts, TTI would suffer a huge shock. The power of the channel king can both make a brand and threaten a brand.
The power of the channel is a profound gate for Chinese power tools going overseas. For most Chinese power tools companies, breaking into mainstream channels such as Home Depot and Lowe's is extremely difficult—these channels have extremely high requirements for brand, quality, and supply chain, and shelf resources are limited and competition is fierce. Chinese companies either do OEM for the channels' private labels (earning thin margins) or build their own brands to squeeze onto the shelves (extremely hard). TTI's success is largely because it commands the channel (Ryobi exclusive to Home Depot, Milwaukee deeply bound); while large numbers of Chinese companies are stuck in the mid-to-low end, one important reason being that they cannot break into mainstream channels and can only do OEM for others or go through low-end channels. The channel is a key crux of Chinese power tools' "big but not strong"—they can make it, but cannot sell it onto mainstream shelves.
The channel landscape is also being changed by e-commerce. Walmart and Amazon together account for about a third of tracked order volume, and e-commerce's power is rising. E-commerce is an opportunity for Chinese power tools—through cross-border e-commerce such as Amazon, Chinese brands can bypass the brand barriers of traditional channels (Home Depot, Lowe's) and reach overseas consumers directly. Greenworks is strong on the Amazon channel, and some Chinese tools brands have also built overseas sales through cross-border e-commerce. The rise of e-commerce gives Chinese power tools a new pathway to "bypass the channel kings"—without squeezing onto Home Depot's shelves, they can still sell to US consumers through e-commerce. This is a new opportunity for Chinese power tools brands to break through.
The channel is also tied to the US demand cycle. Sales at Home Depot and Lowe's are closely correlated with the US real estate and DIY cycle—when real estate is hot and there is much renovation, power tools demand is strong; when real estate is cold and turnover is low, demand is weak. In the first half of 2026, the US DIY market has yet to recover fully (comparable sales at Home Depot and Lowe's grew only 0.6%, the DIY customer base remained under pressure), but the tools category outperformed the broader market and the professional (Pro) customer end showed strong resilience. The channels' inventory cycle (restocking, destocking) also affects orders for Chinese power tools—from 2024 to 2025, Home Depot's inventory turnover slowed, reflecting weak demand. The warmth and chill of the channel are transmitted directly to Chinese power tools' export orders.
The existence of the channel kings reveals the deepest gate in Chinese power tools' overseas expansion—it is not only about being able to make it and make it cheaply, but also about being able to sell it onto mainstream channels and build a brand. TTI rose by commanding the channel (Ryobi exclusive to Home Depot), while large numbers of Chinese companies are stuck being unable to break into mainstream channels and can only do OEM—this contrast is the channel-dimension manifestation of "big but not strong." For Chinese power tools to go from "big" to "strong," besides climbing on technology, brand, and capacity, they must also break through on the channel—either squeeze into mainstream channels (extremely hard) or open new pathways with e-commerce (an opportunity). Breaking through on the channel is a link that Chinese power tools brands cannot bypass on their climb. And beyond the channel, Chinese power tools have a market relatively free of the channel kings' constraints—domestic demand at home, which is their steady base.
24. The European Battlefield: Bosch Closes Plants While Chinese Brands Gain Share
Chinese power tools' overseas push is not fixed only on the US. Europe, this vast and mature market, is another important battlefield—and on this battlefield an intriguing phenomenon is unfolding: Europe's homegrown giant (Bosch) is closing plants to cut costs, while China-line brands (TTI) are growing. This contrast reveals yet another facet of the global shift in power tools power.
First, look at the contraction of Europe's homegrown giant. Bosch Power Tools—this century-old German giant—is going through a painful contraction. It plans to cut about 560 jobs at its Leinfelden headquarters by the end of 2026 (more than a quarter of the roughly 2,000 local employees), and subsequently announced it would close two plants in Leinfelden and Saxony before the end of 2026 (affecting 500 people in total), shifting capacity to Miskolc, Hungary. Bosch officially attributed the reasons to a pandemic boom that overdrew demand plus inflation suppressing consumption. This German giant's strategic pivot is—contract domestic capacity, shift to low-cost regions (Hungary), focus on the cordless product portfolio, and expand the North American business. Even a European homegrown giant like Bosch is near-shoring to cut costs—this shows that Europe's high-cost structure has already made it hard for homegrown giants to sustain themselves.
It is not only Bosch. Germany's value-for-money brand Einhell is also near-shoring—in December 2024 it built a new plant in Hungary dedicated to producing Power X-Change batteries, planning an annual output of 1 million battery packs plus 500,000 chargers. Even European homegrown brands are shifting capacity to low-cost regions—this trend objectively gives Chinese brands an opening.
Now look at the growth of China-line brands in Europe. In sharp contrast with the contraction of Europe's homegrown giant—TTI's 2025 European sales grew 9.0% (in local currency), and China-line brands outperformed the broader European market. While Bosch closes plants and Einhell shifts capacity, China-line brands (TTI's Milwaukee and Ryobi) are growing in Europe—this contrast is yet more evidence of global power tools power shifting from Europe's homegrown players to Chinese forces. China-line brands, riding their lead in cordless, their value for money, and their relatively flexible cost structures, grabbed growth in Europe, the home turf of Europe's homegrown giants.
The demand cycle of the European market is also worth recording. Europe's DIY retailers—Hornbach (revenue of about 6.43 billion euros in fiscal 2025/26, up 3.8%) and Kingfisher (parent of B&Q and Castorama, which raised its profit guidance)—reflect the state of Europe's DIY market as "resilient but with cautious consumers." Europe's power tools market was worth about 40.4 billion US dollars in 2025 (an important share in the global measure), with a projected average annual growth of 5.5% to 6.4%. Europe is a vast, mature, but steadily growing market—it is not, like North America, a main battlefield for Chinese brands' overtaking on the curve, but it is a battlefield where Chinese brands can expand steadily on value for money and cordless.
The European battlefield reveals a shared logic in global power tools competition—the cost structure decides who rises and who falls. The predicament of Europe's homegrown giant (Bosch) is rooted in high costs—Europe's soaring labor, energy, and environmental costs make locally produced power tools unable to compete with China on cost, leaving only the options of closing plants and shifting capacity. And the growth of China-line brands (TTI) relies on a relatively flexible cost structure (global production sites) and grasp of the trend (cordless). This logic is consistent with the US market (Stanley Black & Decker's predicament vs. TTI reaching the summit)—whether in the US or Europe, the homegrown giants of the US, Europe, and Japan all face the predicament of high costs, while Chinese forces (whether Chinese manufacturing or Chinese brands) are eroding their share on cost and trend.
The lesson of the European battlefield for Chinese power tools is—Europe is a market where one can expand steadily but must operate for the long term. It does not, like North American OPE, have a new track for overtaking on the curve, but it is a vast, mature market where Chinese brands can steadily raise share on value for money, cordless, and the space left by the contraction of Europe's homegrown giants. TTI's 9% growth in Europe and Bosch closing plants—this ebb and flow shows that Chinese brands' opportunity in Europe is opening up. But the European market also has challenges—the EU's trade remedies (the anti-dumping case against Chinese robotic mowers), green regulations (energy-efficiency and sustainability requirements), and the brand barriers of a mature market are all thresholds that Chinese brands must face in expanding in Europe.
From the US to Europe, the two main global battlefields of power tools are staging the same story—the homegrown giants of the US, Europe, and Japan are contracting under high costs and tariffs, while Chinese forces are rising on cost and trend. This global power shift is the macro backdrop of Chinese power tools' journey from "big" to "strong." Chinese power tools' climb is not only about becoming stronger themselves, but also about rising on the predicaments of the US, European, and Japanese giants. And whether this rise can be sustained, and whether it can turn from "a rise in share" into "brand strength," depends on whether Chinese power tools can, beyond their cost advantage, build the comprehensive competitiveness of brand, channel, compliance, and intelligence—which is precisely the core topic of going from "big" to "strong" that this report emphasizes again and again.
25. The Battery Cell Contest: How China Is Replacing Japan and Korea
The energy core of cordless tools is the battery cell—the high-rate cylindrical lithium cell (18650, 21700). This seemingly inconspicuous component is staging an industrial contest in which China replaces Japan and Korea, and the outcome of this contest deeply affects the autonomy and resilience of China's power tools supply chain.
First, look at the weight of this market. In 2024, global shipments of power-tool lithium batteries reached 2.63 billion cells, up 25.4%, with a market size of 13.07 billion yuan. The vast majority of these cells are cylindrical high-rate cells—tool work requires instantaneous high-current output (such as the impact of an impact drill or the high speed of an angle grinder), placing very high requirements on the cell's discharge rate, which differs from cells used in phones and electric vehicles. High-rate cylindrical cells are a specialized segment with a not-low technical threshold.
This market was dominated in the past by Japan and Korea. Samsung SDI was long the world's No. 1 in tool cell shipments (a share of about 36% around 2020), while Japan's Murata (formerly Sony's battery unit) and Korea's LG also held important shares. Chinese cell makers were, in the past, followers in this high-end segment. But the landscape is reversing rapidly. Samsung SDI is still the world's No. 1, but its share has clearly declined; Japan's Murata is contracting—in fiscal 2023 it took an impairment of 49.5 billion yen (about 319 million US dollars) on cylindrical lithium battery equipment, a substantial retreat of Japan's tool cells; Samsung SDI's tool battery revenue also fell in the fourth quarter of 2024 due to destocking by major customers. Japan and Korea are retreating, and China is advancing.
The rise of Chinese cell makers has several representatives. EVE Energy—the world's No. 2, which only entered tool cells in 2018, with its share rising year by year and customers including TTI and Metabo. Tenpower (under Highstar Lithium/Wina Lithium)—No. 2 domestically and No. 3 globally, with capacity of 600 million cells in Zhangjiagang plus 400 million cells in Malaysia Phase 1 (put into production in April 2025), totaling 1 billion cells per year, with Phase 2 planned to reach 1.6 billion cells in 2027; its tabless 21700 cell has a yield of 99% (industry average about 90%) and a unit cost 15% lower, and it has won a roughly 95.85-million-US-dollar ternary cylindrical order from Bosch. Ampace—the first to mass-produce tabless 21700 cells, beginning volume shipments in 2024 and already entering the supply chains of TTI, Stanley Black & Decker, and Bosch. BAK Battery has also established cooperation with TTI. Chinese cell makers are moving from "following" to "leading"—not only raising share, but advancing across the board in technology (tabless), cost (15% lower), and capacity (going overseas to Malaysia).
The significance of China replacing Japan and Korea in cells goes beyond the cells themselves. First, supply-chain autonomy. The cell is the energy core of cordless tools; in the past, reliance on Japan and Korea meant supply was controlled by others; now Chinese cell makers can supply the world's leading tool brands (TTI, Bosch, and Stanley Black & Decker all use Chinese cells), greatly raising the autonomy of China's power tools supply chain. Second, cost and technology advantages. Chinese cells are lower in cost (15% lower) and not behind in technology (tabless yield of 99%)—this advantage spills over to the finished product, making Chinese power tools more competitive on cost and performance. Third, a voice in the global supply chain. When Chinese cell makers supply the world's leading brands, China gains a deeper voice in the global power tools supply chain—the energy cores of TTI's and Bosch's cordless tools come from Chinese cells.
The cell replacement also reveals a deep advantage of China's power tools supply chain—the "chain-style rise." Chinese cell makers can rapidly replace Japan and Korea thanks to China's vast downstream demand (power tools, lawn mowers, energy storage, electric vehicles) and its complete lithium-battery supply chain. China's lithium-battery industry (from materials to cells to battery packs) is the strongest in the world, and this overall strength spills over to tool cells, letting Chinese cell makers rapidly catch up with and even surpass Japan and Korea. This follows the same logic as the tire industry's upstream hidden champions (molds and equipment ranking first in the world)—the strength of Chinese power tools lies not only in the finished product but even more in a complete and powerful supply chain (cells, motors, controllers leading the world). The completeness and coordination of the supply chain is the deepest moat of Chinese power tools relative to latecomer countries.
Worth recording is that the downstream of Chinese tool-cell makers is spilling over into higher-value-added scenarios—the cells of Tenpower and EVE are extending from tools, lawn mowers, and energy storage to future scenarios such as AI robots and eVTOL. This is yet another embodiment of the "chain-style rise" of China's lithium-battery supply chain—once the technology and cost advantages of one link (tool cells) mature, they spread along the supply chain to new scenarios. The battery cell contest is not just about power tools, but is part of the overall rise of China's lithium-battery industry.
Victory in the battery cell contest is an important breakthrough for Chinese power tools' journey from "big" to "strong" in the supply-chain dimension. When China not only makes six to eight tenths of the world's power tools but can also make the cells that supply the world's leading brands—it gains a voice over the core components of the supply chain, advancing from "a finished-product power" toward "a supply-chain power." The replacement in cells, together with the domestic substitution of motors (Dechang, Leili), controllers (Topband, Tenree), and switches (Huazhijie), is making the autonomy of China's power tools supply chain ever higher—this is the most solid competitiveness base relative to latecomer countries and to industries that partly rely on imported core components. And atop this base, Chinese power tools have a steady base—the domestic demand market at home.
26. Battery Cells Go Global: Tenpower's Malaysian Plant
The story of Chinese battery cells displacing their Japanese and Korean counterparts has a deeper layer still—the cell makers themselves are going global. The plant that Tenpower has built in Malaysia marks the upgrade of China's power-tool battery cells from "made domestically, supplied worldwide" to "made globally, supplied worldwide," and it is a microcosm of the globalization of China's lithium-battery supply chain.
Consider the move itself. Tenpower (a subsidiary of Azure Lithium)—the number-two cell maker in China and number three in the world for power-tool cells—began production in Malaysia in April 2025, with a first phase of 400 million cells per year. Added to the 600 million cells at its Zhangjiagang plant, that brings the total to 1 billion cells per year, with a second phase planned to reach 1.6 billion cells by 2027. Why did Tenpower go to Malaysia to build a cell plant? The logic is the same as for the finished-tool makers going global—avoid tariffs, get close to the market, follow the customer. As China's power-tool assemblers (TTI, Chervon) move their assembly plants to Vietnam and Thailand, the cell, being a core component, must go global too and supply them locally. At the same time, cells manufactured overseas can sidestep tariffs on China and help the tool makers meet rules-of-origin requirements (using overseas-made cells raises the local value-add in places like Vietnam). Cells going global is the inevitable consequence of China's lithium-battery supply chain following the finished-tool makers abroad.
The significance of cells going global reaches beyond the cell itself. First, it marks the globalization of China's lithium-battery supply chain. In the past, China "made cells domestically and supplied the world"; now Chinese cell makers are beginning to "make them overseas and supply the world"—exporting manufacturing capacity to Malaysia and Southeast Asia. This is China's lithium-battery industry upgrading from "made in China" to "China's global manufacturing." Second, it strengthens the resilience of China's power-tool supply chain. When cells (a core component) can also be made overseas, China's global supply chain for power tools becomes more complete and more resilient—finished tools assembled in Vietnam, cells manufactured in Malaysia, both able to avoid tariffs on China and satisfy rules of origin. Third, it helps Chinese cell makers cope with geopolitical risk. As the US and Europe raise tariffs on Chinese lithium batteries (the Section 301 rate on lithium batteries is 25%) and geopolitical risk in the supply chain mounts, overseas manufacturing helps Chinese cell makers diversify risk and keep their global customers.
Cells going global also reveals the trend of "chain-wide globalization" in China's lithium-battery supply chain. China's lithium-battery chain—from materials to cells to battery packs to finished tools—is going global as a whole. Finished-tool makers going global (TTI and Chervon to Vietnam) pull cells abroad (Tenpower to Malaysia), which in turn may pull materials and equipment overseas. This is the coordinated globalization of an entire supply chain—not the relocation of a single link, but the overseas deployment of the whole chain. This chain-wide globalization is the deep strategy by which China's lithium-battery industry (and China's power-tool supply chain) responds to the tariff siege and geopolitical risk—deploying the entire supply chain across multiple locations worldwide to diversify risk, get close to markets, and satisfy each region's rules of origin.
But cells going global also brings challenges. First, the cost and management of overseas manufacturing. Manufacturing costs, supply-chain support, and management complexity in Malaysia and Southeast Asia are all higher than at home—cells going global requires enormous investment and fine-grained management. Second, guaranteeing technology and quality. The cell is a high-technology, high-quality-requirement component, and whether an overseas plant can guarantee the same technology and quality as at home is a test. Third, the completeness of supply-chain support. Cell manufacturing needs support from upstream materials (cathode, anode, electrolyte, separator)—if this support does not go abroad too, the overseas cell plant still has to rely on imported Chinese materials, and localization is incomplete. For cells going global to truly succeed, the entire lithium-battery supply chain must go global in coordination, and that is a long process.
The deepest significance of cells going global is that it demonstrates the ultimate strategy by which China's power tools (indeed, Chinese manufacturing) respond to tariffs and geopolitical risk—the global deployment of the supply chain. When a single production location is no longer safe, when tariffs escalate from striking at Chinese manufacturing to striking at China's supply chain, China's response is to deploy the entire supply chain (from finished tools to core components to materials) across multiple locations worldwide, diversifying risk, getting close to markets, and satisfying local rules of origin. Tenpower's Malaysian plant is the embodiment of this strategy at the cell link; and the globalization of China's entire power-tool supply chain (finished tools to Vietnam, cells to Malaysia, and possibly materials and equipment following) is the full unfolding of this strategy.
From finished tools going global to cells going global, from "China+1" to "supply-chain globalization"—China's power tools going abroad are moving from the shallow (relocating assembly) to the deep (relocating the supply chain, relocating core components). This deepening has been forced out by tariffs and geopolitical risk; costs and complexity have risen sharply, but it also makes China's power-tool supply chain more complete, more resilient, and better able to cope with the complex environment of global trade. Tenpower's Malaysian plant is a landmark move in the deepening globalization of China's lithium-battery and power-tool supply chains—it signals that the global footprint of China's power tools is moving from "globalization of production location" to "globalization of the supply chain," from "assembly going abroad" to "the whole system going abroad." This is the deep evolution, along the globalization dimension, of China's power tools moving from "big" to "strong."
27. The Domestic Bedrock: Dongcheng and Import Substitution
Most of China's power-tool attention is directed toward going global (exports do, after all, account for the lion's share), but there is one market that is its steady bedrock and also the home turf for the rise of domestic brands—the domestic demand market. This market is relatively insulated from tariff shocks; it is the ballast that carries Chinese power-tool companies through export volatility, and it is the main battlefield where Chinese brands substitute for foreign ones.
Consider first the scale of the domestic demand market. Estimates of the size of China's domestic power-tool market vary by definition—ranging from roughly 20 billion to 40 billion yuan (depending on whether the statistical boundary is "sales scale," "demand scale," or "output value including exports"). In 2024 China produced 280 million power tools, and domestic consumption exceeded 80 million units. This is a huge domestic demand market; although growth is steady, it is stable and reliable—China's vast construction, renovation, manufacturing, and repair needs sustain continuous power-tool consumption.
The most vivid sample of the domestic demand market is Dongcheng. Headquartered in Qidong, Jiangsu, this company is the standard-bearer of homegrown Chinese power-tool brands—2025 sales of 6.865 billion yuan (domestic 5.486 billion yuan, of which lithium-battery tools were 2.502 billion yuan; overseas 1.379 billion yuan, up 28.8%). It has ranked first in China for power-tool category sales for 12 consecutive years (2013 to 2024), first nationwide in lithium-battery power-tool sales for four straight years from 2021 to 2024, and in 2024 it became the first Chinese power-tool brand to make the "Asia's 500 Most Influential Brands" list. Dongcheng's success is a microcosm of Chinese brands substituting for imports in the domestic demand market—in China's professional power-tool market, Dongcheng has, bit by bit, displaced foreign brands (Bosch, Makita, DeWalt) through value for money, distribution, and quality to reach the number-one sales position.
The value of the domestic demand market stands out especially against the backdrop of the tariff siege. When exports face a tariff roller coaster and overseas markets are riddled with uncertainty, stable domestic demand becomes a safe harbor for China's power tools. A company like Dongcheng, with domestic sales as its mainstay, is relatively insulated from tariff shocks—its 5.486 billion yuan in domestic sales is the ballast that carries it through export volatility. By contrast, companies overly dependent on the US (Chervon at 77%) were badly hurt under tariff shocks. Although the domestic demand market grows steadily and offers thin profits (domestic competition is fierce), it is stable, reliable, and relatively independent of international trade friction—it is China's power tools' "defense" and "bedrock."
The domestic demand market is also the main battlefield for import substitution. China's domestic power-tool market has long been dominated at the professional and high end by foreign/joint-venture brands (Bosch, TTI, Makita China, Black+Decker Suzhou), while domestic brands (Dongcheng, Ken, Devon) have been steadily substituting for them. This import substitution has several drivers. First, value for money. Domestic brands offer quality close to the foreign brands at a lower price, gradually eating into the foreign brands' share. Second, lithiumization. Lithium-battery tools are a new growth point, and domestic brands (Dongcheng ranks first in lithium-battery sales) have seized the lithiumization opportunity. Third, distribution and service. Domestic brands have denser distribution and faster service response within China, something the foreign brands can hardly match. Dongcheng's 12 consecutive years as the domestic sales leader is precisely the fruit of import substitution in the professional power-tool market.
But the domestic demand market has its limits and challenges too. First, steady growth. China's domestic power-tool market is already relatively mature, and growth is slowing—domestic demand is the ballast, not a high-growth engine. Second, intense involution. The domestic market suffers overcapacity and fierce price wars, and profits are squeezed very thin—stability does not equal high profit. Third, the high end is still held by foreign brands. The high-end professional tier of the domestic demand market (Bosch, Hilti, Milwaukee) is still dominated by foreign brands; domestic substitution is mainly in the low-to-mid tier and in lithium-battery tools—domestic substitution at the high end is still climbing an arduous slope.
Placing the domestic demand market within the overall picture of China's power tools, its positioning is clear—it is the ballast (a stable bedrock that carries the industry through export volatility), the main battlefield for import substitution (the Dongchengs steadily displacing foreign brands), but not a high-growth engine (steady growth, intense involution). As China's power tools move from "big" to "strong," going global is "offense" (pursuing growth and globalization) and domestic demand is "defense" (providing a stable stronghold for import substitution). A healthy Chinese power-tool company needs a balance of offense and defense—using steady domestic demand (the Dongcheng model) as a foundation to support offensive globalization (the TTI, EGO model). Companies that over-rely on exports and neglect domestic demand will lose their balance amid tariff volatility; only companies that combine offense and defense, weighting domestic demand and exports equally, can ride through cycles and grow steadily.
The domestic bedrock and import substitution are a steady fulcrum for China's power tools moving from "big" to "strong." It may not catch the eye the way OPE's cornering overtake or TTI's ascent to the top do, but it is the solid stronghold from which China's power tools ride through the tariff storms, gradually displace foreign brands, and build homegrown brands. Dongcheng's 12 consecutive years as the domestic sales leader is the best proof of this steady fulcrum—on its own home turf, Chinese brands are, bit by bit, wresting back share from foreign brands, accumulating the most solid strength for the move from "big" to "strong." Beyond domestic demand, the technological frontier of China's power tools—brushless motors and intelligentization—is also powering the industry's upgrade.
28. The Barometer of Demand: The US Housing Market and the DIY Cycle
China's power-tool exports, and exports to the US in particular, hinge their fate on a single macro variable—the US housing market and DIY cycle. Only by understanding this cycle can one understand the ups and downs of China's power-tool exports, and why 2026 is a year of "waiting for recovery."
Consider first the chain of logic. Demand for power tools comes largely from construction, renovation, and home repair—and these activities are closely tied to the housing cycle. When housing is hot—more homes bought and sold, more renovation, more repair—power-tool demand is strong; when housing is cold—fewer homes changing hands, less renovation—power-tool demand is weak. The US DIY market especially (people doing their own renovation and repair) depends heavily on homeowners' willingness to renovate, and that willingness is in turn influenced by home prices, mortgage rates, and economic confidence. So the US housing market and DIY cycle are the barometer for China's power-tool exports to the US.
Now consider the state of the US housing market and DIY in 2026. In the first half of 2026, the US housing and DIY market had not yet fully recovered. Existing-home sales in June 2026 ran at a seasonally adjusted annualized 4.09 million units, down 2.4% month-on-month, while the median price hit a record $440,600, up year-on-year for 36 consecutive months—high home prices suppressed both purchases and turnover. The 30-year mortgage rate in June 2026 was about 6.49%—though it had eased somewhat from before, it remained high, dampening the willingness to buy and renovate. This showed up in the channels—Home Depot's and Lowe's first-quarter 2026 comparable sales grew just 0.6%, with the DIY customer base still under pressure. US housing and DIY had not yet fully recovered, and this directly dampened demand for China's power-tool exports to the US.
But there were structural bright spots too. Although the DIY customer base was under pressure, the tool category outperformed the broader market and the professional (Pro) end showed strong resilience. Home Depot's power-tool (Power) category comparable sales were positive in the first quarter, and Lowe's Pro and home-improvement services were strong. This shows that—even during a housing and DIY downturn—demand for tools from professional projects and essential repairs remains relatively healthy; it is discretionary consumer spending (major renovations) that is contracting, while professional essentials (projects, repairs) hold up. The implication of this structural divergence for China's power tools is that the professional (Pro) market is more cycle-resistant than the DIY market—one reason Milwaukee (professional grade) has grown year after year while some DIY brands are under pressure.
Policy is also underpinning demand. Although US housing and DIY rely on the market, some structural demand provides support—for example, ongoing repair of aging homes and essential professional projects. And within China, trade-in policies are stimulating related demand—the 2024 truck trade-in program drove a heavy-truck recovery (indirectly pulling tool demand), and the 2026 auto trade-in program continues. Although these policies mainly target automobiles, they reflect the logic of "consumption-stimulus policy underpinning demand."
The most critical variable in the demand barometer is rate cuts. The market broadly expects that a resumption of Fed rate cuts would stimulate a recovery in US housing and DIY—rate cuts lower mortgage rates, stimulate home purchases and renovation, and thereby pull power-tool demand. But in the first half of 2026 the Fed stood pat for a fourth consecutive time, and rate cuts were slow in coming—this delayed the recovery of US housing and DIY, and delayed the recovery of China's power-tool exports to the US as well. Brokers' judgments about the 2026 earnings recovery of China's power tools are, to a large extent, betting on the catalyst of "resumed rate cuts plus housing recovery." When rate cuts arrive and when housing recovers directly determines the pace of the recovery in China's power-tool exports.
Placing this barometer within the picture of 2026, the near-term trajectory of China's power-tool exports to the US is "wait for rate cuts, wait for recovery." In the first half of 2026, US housing and DIY had not yet recovered and rate cuts had not arrived, so demand for China's power-tool exports to the US was under pressure; but the tool category (especially professional grade) was relatively healthy, and the industry was in repair. A full recovery depends on resumed rate cuts and a housing rebound—and that takes time. So 2026 is more likely to be a year of "waiting for recovery," with China's power-tool exports to the US stabilizing at a low level, waiting for the catalyst of rate cuts and a housing rebound.
The demand barometer also reveals a deep vulnerability in China's power-tool exports—they are highly dependent on the US housing and DIY cycle. When China's power-tool exports flow heavily to the US and US demand hinges on the housing cycle, China's power tools become "a passive bearer of the US housing cycle"—strong when housing is hot, weak when housing is cold, unable to control it themselves. This vulnerability, compounded by the tariff roller coaster, fills China's power-tool exports to the US with uncertainty. The path to resolving this vulnerability is market diversification—not relying on the US alone, but also opening up Europe (TTI's Europe grew 9%), emerging markets, and domestic demand (Dongcheng's steady bedrock). The more diversified the markets, the lower the dependence on a single market's (the US) housing cycle, and the stronger the risk resistance.
This barometer of the US housing and DIY cycle is the key to understanding the ups and downs of China's power-tool exports. It reminds us that the fate of China's power tools depends not only on their own technology, brands, and capacity, but also on the macro cycles of overseas markets. And those who ride through this cyclical volatility are the companies with diversified markets, professional-grade essential-demand support, brand strength, and a domestic demand bedrock. They can hold up during a housing and DIY downturn by relying on the professional grade, on diversified markets, and on domestic demand, waiting for recovery to arrive. This too is a capability that China's power tools must build in moving from "big" to "strong"—not only making well and selling much, but also having the resilience to ride through cycles and diversify market risk.
29. Brushless and Intelligent: The Technological Frontier of Tools
Power tools may look like a mature, traditional industry, but their technological frontier has in fact never stopped advancing—from brushless motors to intelligentization, these technological upgrades are redefining "professional grade" and powering China's power tools' climb toward the high end.
First, brushless motors—a generational upgrade in tool power. As noted earlier, power-tool motors are moving from brushed to brushless. Brushless motors (BLDC) have no carbon brushes, offering higher efficiency (running longer on the same battery), longer life (no carbon-brush wear), stronger power, and precise electronic-control adjustment. Going brushless is a main thread of power-tool technology upgrading—the global brushless-motor power-tool market was about $13.4 billion in 2024 and is projected to reach $24.2 to $25 billion by 2032 (average annual growth above 7%), with Asia-Pacific holding the largest regional share (33.4%). The penetration of brushless motors pushes power tools from "good enough" to "good to use and durable," and it is now standard for professional-grade tools. China has a deep foundation in the motor industry—suppliers such as Johnson Electric (one of the leading tool-motor suppliers, with FY2024 revenue of $3.8 billion) and Jiangsu Leili (annual shipments of over 200 million micro-special motors) make the localization and scaling of brushless motors an advantaged link in China's power-tool supply chain.
Next, intelligentization—an upgrade to the tool's "brain." Modern high-end power tools are getting "smart." There are several directions. First, intelligent control of torque and working conditions. Milwaukee's TORQUE-SENSE uses proprietary sensors plus machine-learning algorithms to achieve precise torque control; its AutoStop anti-bind-up introduces AI to judge working conditions; and Bosch's anti-kickback uses an accelerometer to sense reverse rotation and cut power instantly—these intelligent functions make tools safer, more precise, and less tiring. Second, tool connectivity and asset management. Hilti's ON!Track (IoT tool asset management), Milwaukee's ONE-KEY (tool location, anti-theft, remote lockout, parameter customization), and Hilti's Nuron platform (intelligent batteries collecting usage, performance, location, and health data)—these turn tools from "standalone units" into "networked intelligent assets," with enormous value especially for professional crews managing large numbers of tools. Third, cordless conversion of light equipment. Milwaukee's MX FUEL uses a battery platform to replace small gasoline-powered jobsite equipment (cut-off saws, breakers, generators)—extending intelligentization and cordless power to heavier equipment.
These two technological frontiers, brushless and intelligent, have a dual significance for China's power tools. On one hand, they are an upgrade opportunity—China has supply-chain advantages in motors (brushless), electronics (intelligent control), and lithium batteries (energy), and can leverage these advantages to drive the brushless and intelligent upgrade of power tools, narrowing the gap with high-end brands. On the other hand, they are also where the gap lies—the most cutting-edge intelligentization (Milwaukee's machine-learning torque control, Hilti's IoT asset-management ecosystem) remains an area where European and American brands are relatively ahead. China has moved fairly fast on the localization of brushless motors (having a motor-industry foundation), but on the software, algorithms, and ecosystem of intelligentization, it is still catching up—consistent with the picture of "hardware ahead, software catching up" for tunnel-boring machines and "manufacturing ahead, brand catching up" for tires.
Intelligentization also reveals an upgrade in the dimensions of power-tool competition—extending from "hardware" to "hardware + software + ecosystem." The competition in traditional power tools was mainly in hardware (motors, transmission, working heads); intelligentization introduces competition in software (intelligent control algorithms), data (tool usage data), and ecosystem (the ONE-KEY, ON!Track asset-management platforms). Whoever can make tools "smart," put data to use, and build ecosystems will establish an advantage in the high-end market (especially the professional-crew market). This upgrade is a challenge for China's power tools (software and ecosystem are weak spots) and an opportunity (leveraging China's overall strength in AI and IoT).
These two technological frontiers, brushless and intelligent, are the technological engine of China's power tools moving from "big" to "strong." The localization of brushless motors lets China's power tools catch up with or even lead on power and efficiency; catching up on intelligentization is the lesson China's power tools must make up as they climb toward the high-end professional grade. When China's power tools not only make brushless tools but can also make "smart" tools (intelligent control, networked management, ecosystem services), they will be able to compete head-on with century-old brands like Milwaukee and Hilti in the high-end professional-grade market. Breakthroughs at the technological frontier, combined with the battery platform (the moat), OPE cornering overtake (the new track), and brand climbing (Dongcheng, EGO), form the complete technological and market path for China's power tools moving from "big" to "strong."
Beyond the technological frontier, for a power tool to enter overseas markets it must also clear an invisible threshold—certification. Certification barriers such as UL and CE are yet another checkpoint for China's power tools going global, and the bar is rising ever higher, especially in the safety certification of lithium-battery tools.
30. The Internet of Tools: From Selling Tools to Selling Data
The deepest layer of power-tool intelligentization is not making individual tools smart, but networking tools together and turning data into assets—moving from "selling tools" to "selling data, selling services." This shift is the most cutting-edge business evolution in the power-tool industry, and it is the high-end domain that China's power tools must catch up on as they move from "big" to "strong."
Consider first the form of this evolution. Traditionally, power-tool companies sold "tools"—one-off hardware transactions. Intelligentization lets tool companies sell "tools + data + services"—once tools are networked, companies can collect usage data, location data, and health data, providing services such as asset management, anti-theft, and predictive maintenance. Hilti's ON!Track is the archetype—it is an IoT tool asset-management solution (tags plus gateways plus cloud) that helps professional crews manage hundreds or thousands of tools (where they are, who is using them, how much longer they can be used). Hilti's Nuron platform goes further—intelligent batteries collect usage, performance, location, and health data, uploaded to the cloud, with "the battery becoming the data gateway." Milwaukee's ONE-KEY can likewise track tools, prevent theft, and customize parameters. These turn tools from "standalone hardware" into "networked intelligent assets."
The commercial value of the Internet of Tools is especially enormous for the professional market. A large project crew may have hundreds or thousands of tools, and managing them is a major headache—tools are easily lost, stolen, or misplaced; no one knows who is using them or whether they should be maintained. The Internet of Tools (ON!Track, ONE-KEY) solves this pain point—crews can know in real time each tool's location, status, and usage, greatly improving management efficiency and reducing losses. For professional users, the value of this asset management even exceeds the performance of the tool itself—the management costs it saves and the tool losses it reduces are real money. So the Internet of Tools has become a new dimension of competition and a source of profit in the professional market—companies sell not only tools but also asset-management services and data.
The Internet of Tools also creates new user lock-in. We spoke earlier of battery-platform lock-in; the Internet of Tools is a deeper layer of lock-in—once a crew has connected all its tools to an ON!Track or ONE-KEY system, it is bound to that ecosystem: switching brands means abandoning existing data, management systems, and workflows, at extremely high cost. The Internet of Tools upgrades "battery-platform lock-in" to "data-ecosystem lock-in"—locking in not just the hardware (the battery platform) but also the data and workflow (the asset-management system). This is the deepest moat in the power-tool industry—data-ecosystem lock-in is even harder to break than hardware lock-in.
This high-end domain is precisely China's power tools' weak spot. The Internet of Tools (ON!Track, Nuron, ONE-KEY) is an area where European and American brands like Hilti and Milwaukee are relatively ahead—they have built advantages through software, algorithms, cloud platforms, and data accumulation. Chinese power-tool companies are already very strong in hardware (tools, motors, batteries), but on the "soft power" of software, data, and ecosystem they are still catching up. China can make good tools, but networking tools together, turning data into assets, and building services into an ecosystem—the building of these soft powers is still in its infancy in China. This is consistent with the picture of "hardware ahead, software catching up" for tunnel-boring machines and "manufacturing ahead, brand catching up" for tires—Chinese manufacturing has caught up with or even led on hardware, but there is still a gap on the soft dimensions of software, data, ecosystem, and brand.
But this weak spot is also an opportunity for China's power tools. China has overall industrial strength in IoT, AI, cloud computing, and data (thanks to the pull of industries such as the internet, smart hardware, and new energy)—this strength can spill over into power tools and help Chinese companies catch up on the Internet of Tools. Moreover, the Internet of Tools is still a relatively new field where the landscape is not yet fully set, and Chinese companies have a chance to catch up or even overtake through latecomer advantages, supply-chain coordination, and China's overall strength in intelligentization. TTI's (Chinese-backed) ONE-KEY already has a footprint in the Internet of Tools, showing that Chinese forces are not entirely behind in this field.
The evolution of the Internet of Tools reveals the ultimate direction of competition in the power-tool industry—moving from "selling hardware" to "selling data, selling services, selling ecosystems." Traditional power tools are a one-off hardware business, but intelligentization turns it into an ongoing data and service business—tools networked, data accumulated, services value-added, ecosystems locked in. Whoever can make tools into data gateways, turn data into assets, and build services into ecosystems will establish the deepest moat in the high-end power-tool market (especially the professional market). This direction is a challenge for China's power tools (a soft-power weak spot) and an opportunity (catching up by leveraging China's overall strength in intelligentization).
From selling tools to selling data is the most cutting-edge business evolution in the power-tool industry, and it is the highest domain that China's power tools must climb as they move from "big" to "strong." When China's power tools not only make sixty to eighty percent of the world's tools and not only build battery platforms, but can also network tools together, turn data into assets, and build services into ecosystems—they will move from "big in hardware" to "strong in ecosystem," from "world's factory" to "ecosystem leader." This evolution from hardware to data, from tools to ecosystem, is the longest-term and most valuable direction for China's power tools to climb. It tests not only the ability to make tools, but more importantly the comprehensive ability to integrate hardware, software, data, services, and ecosystem—and that is precisely the deepest lesson of Chinese manufacturing moving from "big" to "strong."
31. The Certification Barrier: The Invisible Threshold of Lithium-Battery Safety
For a power tool to sell overseas, besides clearing tariffs and channels, it must clear an invisible threshold—certification. Safety certifications such as UL and CE are an invisible barrier for China's power tools going global, and as cordless tools proliferate, the bar for lithium-battery safety certification is rising ever higher, becoming a substantive obstacle for small and medium-sized enterprises going abroad.
Consider first the necessity of certification. Power tools, especially lithium-battery tools, involve electrical safety and battery safety—overheating, short circuits, electrical hazards, and the thermal-runaway risk of lithium batteries. To protect consumers, every country has mandatory safety certification: the core for the North American market is UL 62841-1 (safety of electric handheld/transportable tools and lawn-and-garden machinery) plus UL 2595 (general requirements for battery-powered equipment), with chargers additionally requiring IEC/UL 60335-2-29; the European market requires CE certification; and beyond that, all lithium batteries must mandatorily pass the UN 38.3 transport test before air-freight export. These certifications are the access threshold for power tools to enter overseas markets—without certification, products cannot enter formal channels and cannot be sold in compliant markets.
The impact of certification barriers on China's power tools is dual. For leading companies, certification is a "necessary cost"—companies with scale and resources such as TTI, Chervon, and Great Star Tools can bear the cost and cycle of certification and turn it into a quality endorsement. For small and medium-sized enterprises, certification is a "substantive obstacle"—the stacking of multiple standards (UL, CE, UN 38.3), non-trivial costs, and long cycles make it hard for many small and medium power-tool companies to bear, leaving them shut out of compliant markets or driven to gray channels and the low end. Certification barriers objectively accelerate the concentration of China's power-tool industry toward the leaders—leading companies able to obtain certification can enter high-end compliant markets, while small and medium enterprises unable to certify are trapped in the low-to-mid tier.
The bar for lithium-battery certification is rising especially fast. As cordless tools proliferate, the lithium battery has become the core of power tools, and the safety risks of lithium batteries (thermal runaway, fire) have made certification of lithium batteries ever stricter in every country. North America's UL 2595 and the UN 38.3 for air-freighting lithium batteries—these lithium-battery-focused certifications have an ever-higher bar. And precisely under the cordless trend, the lithium battery is unavoidable—to make cordless tools, one must pass lithium-battery certification. This makes lithium-battery certification a key threshold for China's power tools going global in the cordless era. At the same time, it is also an opportunity—Chinese cell makers able to pass high-standard lithium-battery certification (Tenpower, EVE, and Sunwoda have entered the TTI and Bosch supply chains, showing their cells can pass top-tier certification) can instead use the certification barrier to build an advantage, keeping non-compliant rivals out.
Certification barriers are also tied to a larger trend—global requirements for product safety, environmental protection, and compliance are rising across the board. UL, CE, and UN 38.3 are safety certifications, and the EU also has various regulations on environmental protection, energy efficiency, and sustainability. The threshold for global market access is extending from "tariff" to "non-tariff" (certification, compliance, standards). For China's power tools, this is both a challenge (rising compliance costs, especially for small and medium enterprises) and an opportunity (leading companies able to meet high standards can use compliance capability to build differentiated advantages, keeping low-quality rivals out). Certification and compliance capability is becoming a new dimension of China's power tools' global competition.
The deeper implication of certification barriers is consistent with the green barriers of tires (EUDR, the labeling law)—the dimensions of global market competition are extending from price toward compliance, safety, and standards. In the past China's power tools won on price and capacity; in the future they must also win on compliance capability (passing certification, meeting standards, satisfying regulations). This shift is an opportunity for the leading Chinese power-tool companies (they are able to comply and can use it to build advantages and squeeze out low-quality rivals) and a challenge for small and medium enterprises (high compliance costs may shut them out of compliant markets). Certification barriers are becoming yet another driver of differentiation and consolidation in China's power-tool industry—leaders with compliance capability climb toward high-end compliant markets, while small and medium enterprises without compliance capability are trapped in the low end or cleared out.
From tariffs to channels to certification—the thresholds that China's power tools must clear to go global grow more hidden and more testing of comprehensive capability one after another. Tariffs test global capacity deployment, channels test brand and market capability, and certification tests compliance and standards capability. These three thresholds together constitute the obstacles that China's power tools must cross to move from "world's factory" to "global brand." Those who can cross all three are the leading companies with brands, global footprints, and compliance capability—they are emerging from an industry that is "big but not strong." This process of emergence is also accompanied by the rise of a group of Chinese upstream hidden champions, which are the most solid foundation of China's power-tool supply chain.
32. Chronicle: From the Summer of 2025 to the Height of Summer 2026
Laying out the major events in China's power tools over the past year in chronological order gives the most intuitive feel for the industry's rhythm under the multiple variables of tariffs, capital, and new tracks. This chronicle is the temporal coordinate for understanding China's power-tool situation in 2026.
August 2025. TTI released its interim report for the first half of 2025, with record sales of $7.83 billion, up 7.1%, Milwaukee up 11.9%, Ryobi up 8.7%, and a gross margin of 40.3%. In the same month, Chervon Holdings' share price touched a historic low of HK$33, down more than 53% from its March high of HK$70.44—in Morgan Stanley's tariff-sensitivity analysis, Chervon's US-related revenue share was 77%, the highest of the 30 Chinese stocks covered. Great Star released its interim report, with the Americas accounting for 65% of revenue and the own-brand share rising to 48%.
September 2025. After Chervon's investor day, Daiwa Securities sharply raised its target price from HK$11 to HK$25 and upgraded its rating to outperform—the market expected profit release after Chervon's capacity relocation.
October to November 2025. At the China-US economic and trade consultations in Kuala Lumpur, the US side canceled the 10% fentanyl tariff, and the 24% reciprocal tariff remained suspended for another year. In the same period, in response to a complaint from Husqvarna, the EU formally opened an anti-dumping investigation into robotic lawnmowers originating in China—green barriers and trade remedies extending to emerging categories, involving Segway (Ninebot), Ecovacs, Roborock, Anker, and others.
December 2025. Stanley Black & Decker announced the sale of its aerospace business (CAM) to Howmet for $1.8 billion, with closing expected in the first half of 2026—continued slimming down to focus on the core tools business. Delran Minghai (BLUETTI, portable energy storage) filed with the Hong Kong Stock Exchange—the energy-storage track adjacent to tools is also being capitalized.
January 2026. Great Star issued an earnings preview, forecasting a 5% to 20% increase in 2025 net profit, with brokers commenting that they were "optimistic about the earnings elasticity that rate cuts would bring." Globe (Greenworks) issued an earnings preview forecasting a full-year 2025 net loss excluding non-recurring items of 280 to 360 million yuan.
February 2026. The US Supreme Court ruled 6 to 3 that the IEEPA tariffs were unlawful and void, with all the reciprocal tariffs since "Liberation Day" nullified, Customs halting collection from February 24, and refunds of up to roughly $175 billion—the turning point of the tariff roller coaster. Trump immediately invoked Section 122 of the Trade Act of 1974 to announce a 10% global surcharge tariff.
March 2026. TTI released its full-year FY2025 results (revenue of $15.3 billion, overtaking Stanley Black & Decker), and its share price surged as much as 15% intraday in March (southbound-capital holdings had already reached 48.85% by the end of February)—TTI's ascent to the top sparked a market frenzy.
Spring 2026. Chervon's EGO launched its first borderless robotic lawnmowers (RM2000E/RM4000E) in Europe, covering 2,000/4,000-square-meter lawns and connecting to the EGO 56V battery ecosystem—a Chinese brand extending its battery platform to robotic lawnmowers.
April 2026. The FY2025 annual-report season was concentrated—TTI reached new highs against the trend, Chervon saw both revenue and net profit decline, Globe posted a massive loss, and Great Star grew its net profit—sharp industry divergence. In the same month TTI rose nearly 7% in a single day, with net inflows of principal funds (a repair rally after the reciprocal-tariff shock).
May 2026. Home Depot and Lowe's released first-quarter 2026 results—comparable sales grew just 0.6%, with the DIY customer base under pressure, but the tool category outperformed the broader market and the Pro end showed strong resilience. Globe turned a profit in the first quarter.
June 2026. The Fed's FOMC stood pat for a fourth consecutive time, keeping rates unchanged—rate cuts slow in coming, dampening US housing and DIY demand. Great Star planned to acquire the Swiss high-precision measurement-tool brand TESA—M&A expansion continuing.
July 2026. Companies entered the window period ahead of the 2026 interim-report season, with the market watching the pace of overseas-capacity ramp-up and earnings repair.
Reading this chronicle through, several undercurrents emerge clearly. First, the tariff roller coaster—from the surge in reciprocal tariffs in 2025 to the Supreme Court's overturning in February 2026, the wild swings in tariffs were the biggest variable of the year. Second, the divergence of fates—TTI ascending to the top, Chervon in painful adjustment, Globe in massive losses, Great Star in repair—the same tariff roller coaster, ice and fire, with the industry concentrating toward the leaders at an accelerating pace. Third, the advance of new tracks—the EU anti-dumping on robotic lawnmowers, the launch of EGO's robotic lawnmowers, the surge of Ninebot and Ecovacs—OPE electrification and robotic lawnmowers becoming the new battlefield for Chinese brands' cornering overtake, but also facing the challenge of trade remedies. Fourth, capital and M&A—Chervon's target-price upgrade, Great Star's acquisition of TESA, Positec's financing, energy-storage companies filing—capital is backing the leading companies and driving industry consolidation.
This chronicle is the most vivid temporal record of China's power tools at this volatile juncture of 2025 to 2026. It has the towering waves of the tariff roller coaster, the historic moment of TTI's ascent to the top, and the new opportunity of robotic lawnmowers' cornering overtake—in this year, China's power tools went through trials and seized opportunities. And those who rode through this chronicle and emerged from the trials are the leading companies with global footprints, brand strength, and new-track breakthroughs. Their performance is the most authentic footnote, at this juncture, to China's power tools moving from "big" to "strong."
33. Upstream Hidden Champions: The Chinese Supply Chain Behind a Single Tool
Just as with tires, the strength of China's power tools lies not only in the assembly plants but, even more, in that invisible supply chain upstream. Along this chain, China harbors a group of "hidden champions"—firms that lead the world in narrow niches, and that serve as the deep source of the resilience and competitiveness of China's power tool industry chain.
Controllers—the Topband and Hoteam duopoly. The smart controller is the "nervous system" of a power tool, governing the motor's speed, torque, and operating conditions. In this segment, Topband and Hoteam form a duopoly—both are major customers of TTI, and Hoteam has also entered the supply chains of Bosch, Black+Decker, and Hilti. China's power tool controller market is projected at around RMB 12.5 billion in 2025, with the global market at roughly RMB 18 billion. When the controllers of the world's top tool brands all come from China's Topband and Hoteam, China gains a real voice over this core component.
Switches and components—Huazhijie. The switch of a power tool (controlling on/off and speed regulation) is a key component. Huazhijie (listed on the Shanghai Stock Exchange main board in June 2025) focuses on smart switches, controllers, brushless motors, and precision structural parts; its core revenue in 2024 was RMB 1.213 billion (smart switches accounting for 48%), with customers including Black+Decker, TTI, and Makita. The top five global power tool switch manufacturers (Defond, Huazhijie, Kedu, Marquardt, Weida, etc.) together hold about 37% of the market, while China's market accounts for roughly 53% of the global total—in the switch segment, China holds global dominance.
Motors—Johnson Electric and Leili. In brushless motors (the heart of the tool), Johnson Electric is one of the leading suppliers of tool motors (FY2024 revenue of USD 3.8 billion, with plants in 22 countries), and Jiangsu Leili ships more than 200 million micro-special motors a year. China's deep foundation in the motor industry has made the localization of brushless motors an area of strength in the country's power tool industry chain.
Battery cells—Tenpower, EVE, and ATL New Energy (Nyobolt/CBAK note). As covered in an earlier chapter—Chinese cell makers (EVE ranked second globally, Tenpower third globally, ATL New Energy the first to launch full-tab cells) are rapidly displacing Japanese and Korean rivals, supplying top global brands such as TTI, Bosch, and Stanley Black & Decker.
Drill chucks, saw blades, accessories—Weida and Boshi. Shandong Weida has ranked first in the world in drill chuck production and sales for 24 consecutive years, with a global market share of about 50%, supplying Bosch, Stanley Black & Decker, and Makita. Boshi Tools is one of China's largest listed diamond-tool enterprises (saw blades, drill bits, grinding discs).
Line up these hidden champions and the picture is strikingly similar to that of tires—China's power tools being "big but not strong" refers mainly to the finished-product brands (compared with Milwaukee and Bosch); but in the upstream supply chain—controllers (a duopoly supplying the world), switches (53% global share), motors (leading suppliers), battery cells (displacing Japan and Korea), and drill chucks (50% globally)—China is in fact "small but very strong," even globally dominant. The world-class strength of this supply chain is the solid bedrock beneath the rise of China's finished power tools, and it is also China's deep advantage over latecomers such as Vietnam and India—others can build assembly plants, but they can hardly stand up such a complete and powerful upstream supply chain within just a few years.
This contrast between "finished products big but not strong, upstream small but very strong" offers an important insight into China's climb up the value chain: the deepest moat for China's power tools lies not in any single finished-product brand, but in the completeness and strength of the entire industry chain. When a single power tool is backed by world-leading controllers, switches, motors, and battery cells, the collaborative efficiency and cost advantage of this industry chain are hard for any single-link competitor to replicate. This is also why, when China shifts power tool capacity overseas, it is "assembly goes abroad, the industry chain stays at home"—Vietnamese plants assemble, but the core controllers, switches, motors, and cells still come from China's hidden champions.
The upstream hidden champions also reveal the "chain advantage" of China's power tool industry. These hidden champions are not isolated—they share China's complete electronics and machinery industry chain with finished power tools, with new-energy vehicles, with consumer electronics, and with energy storage. Controllers, motors, battery cells, precision structural parts—driven by multiple downstream industries (tools, autos, electronics), China has formed a powerful industrial-chain cluster around these capabilities. The completeness and coordination of this cluster is China's deepest moat relative to latecomer nations, and the shared bedrock enabling the rise of China's power tools (as well as tires, shield machines, and gas-turbine components).
For China's power tools to move from "big" to "strong," it must not only shore up the weakness of its finished-product brands but, even more, leverage the strength of its upstream supply chain—using a complete and powerful industry chain to support the premiumization of finished-product brands. The hidden champions are the quietest, and most solid, force behind China's power tools. They prove that the strength of China's power tools lies not only in making sixty to eighty percent of the world's tools, but in mastering the entire core industry chain from controllers to battery cells—this is the "strong" behind the "big," and China's deepest confidence for weathering the tariff storms and supporting a global footprint. And atop this confidence, China's power tools must also confront the real worries on their road from "big" to "strong."
34. Hand Tools and Measurement: The Other Half of China's Tools
Any discussion of China's power tools cannot avoid its two "close relatives"—hand tools and measuring tools. They belong to the same broad "tool" family as power tools, overlapping in industrial geography and crossing over in enterprises, and China likewise holds world-leading strength in both fields. Only by bringing them into view can one see the full map of China's "tool industry."
Consider hand tools first. Hand tools (non-powered tools: wrenches, screwdrivers, hammers, pliers, tool boxes, etc.) form a large market adjacent to, yet independent of, power tools. As noted earlier, Great Star Tools ranks second in the world in hand tools (behind only Stanley Black & Decker), with hand-tool revenue of RMB 10 billion in 2022 and a global market share of about 6%. China is a major hand-tool manufacturing power; in 2024 its exports of hand/machine tools reached USD 17.977 billion and 2.61 million tonnes—larger even than power-tool export value. Zhejiang Yongkang is the "Hardware Capital of China," with an annual hardware-industry output value exceeding RMB 100 billion; Danyang, Jiangsu, has clustered a large number of accessory firms making twist drills, drill bits, and saw blades. Hand tools are an important pillar of China's tool industry, in which China is both an output hegemon and home to world-class enterprises such as Great Star.
Now consider measuring tools. Laser measuring instruments (levels, rangefinders, etc.) are a more technologically demanding branch of the tool family. As noted earlier, Qidong is the largest production base for laser measuring instruments (accounting for 90% of national output and 80% of global output). Changzhou's Laisai Laser is the drafter of industry standards for construction laser measurement, with more than 680 products; in the 2025 level brand rankings it placed second, behind only Bosch. Measuring tools are a hidden strength of China's tool industry—in the niche of laser measurement, China accounts for the overwhelming majority of global output, and enterprises like Laisai are even the setters of industry standards.
There are also the hidden champions among components. Weida of Weihai, Shandong, has ranked first in the world in drill chuck (the part that clamps the bit on a drill) production and sales for 24 consecutive years, with a global market share of about 50%, supplying Bosch, Stanley Black & Decker, and Makita—a global hidden champion in tool components. Boshi Tools is one of China's largest listed diamond-tool (saw blades, drill bits, grinding discs) enterprises. These component firms are an important support for China's tool industry chain.
Put hand tools, measuring tools, and power tools together, and the full map of China's "tool industry" comes into focus. China is the world's largest tool manufacturer—power tools account for sixty to eighty percent of the world, hand-tool output is enormous (Great Star second globally), measuring tools account for most of the world (80% in laser measurement), and components lead globally (50% in drill chucks). China's tool industry is a vast, complete, and coordinated industrial cluster—from power tools to hand tools to measuring tools, from finished products to components, China holds powerful strength everywhere. This complete tool-industry cluster is the solid bedrock for the going-abroad and rise of China's tools (whatever the niche).
The full map of the tool industry also reveals the diverse paths of Chinese tool enterprises. Great Star started in hand tools and extended into power tools (adjacent diversification); Weida extended from drill chucks (components) into battery packs; Laisai focused on laser measurement (deep cultivation of a niche). China's tool enterprises have more than one road from "big" to "strong"—they can reach the global top in adjacent fields such as hand tools, measuring tools, and components; they can deeply cultivate niche markets; and they can diversify into adjacent areas. This diversity of paths gives Chinese tool enterprises more options—they need not all slug it out in the red ocean of power tools, but can lead the world in niches where they hold an edge (hand tools, measurement, components).
The strength of hand tools and measuring tools also provides synergy for the brand climb of power tools. The brand (WORKPRO), channels, and customers that Great Star built in hand tools can support the expansion of power tools; the customer relationships Weida built in components (Bosch, Stanley Black & Decker) can support cooperation on finished products. The various niches of China's tool industry (power, hand, measurement, components) are not isolated but can reinforce one another—a niche's brand, channels, customers, and technology can spill over into adjacent niches. This synergy is another advantage of China's tool-industry cluster, and a boost for Chinese tool enterprises on their way from "big" to "strong."
Bringing hand tools and measuring tools into view gives us a fuller understanding of China's tool industry. China is not only the world's factory for power tools but the global manufacturing center for the entire tool industry (power, hand, measurement, components), and a global leader in some fields. This complete and powerful tool-industry cluster is the bedrock for the rise of China's tools (whatever the niche), and the deepest source of strength as China's tools move from "big" to "strong." And the next leg for this industrial cluster is the climb from "big in manufacturing" to "strong in brand"—Great Star (second globally in hand tools), Laisai (setter of laser-measurement standards), TTI (topping power tools), EGO (dominating OPE)—these leaders of different niches are jointly writing the story of China's tool industry climbing from "world's factory" to "world brand." The full picture of China's tool industry is grander, more complete, and more hopeful than looking at power tools alone.
35. Risk List: The Seven Hurdles of the World's Factory
An honest industry report ought to lay out a sober list precisely where the story is most hopeful. On China's road from "big" to "strong" in power tools, at least seven hurdles lie across the path.
First, the gulf of brand premium. This is the most fundamental hurdle. China makes sixty to eighty percent of the world's power tools, but the brand premium and profits of the high-end professional grade remain largely in the hands of European, American, and Japanese labels such as Milwaukee, Bosch, Makita, and Hilti. TTI's rise to the top cannot obscure one fact—Milwaukee and Ryobi are American brands; pure Chinese brands (Dongcheng, Devon, EGO), though making breakthroughs, still lag the giants overall in brand power and premium. A brand is trust accumulated over a century, and the brand-building of China's power tools has only just begun. The gulf of brand premium directly determines the fate of many Chinese firms as "OEM makers earning razor-thin margins."
Second, the tariff roller coaster and uncertainty. From 2025 to 2026, the tariff on Chinese tools exported to the U.S. surged from 25% to over 79%, then was struck down by the Supreme Court. This violent volatility is even harder on firms than high tariffs themselves—it makes planning impossible and decisions agonizing. And although the IEEPA tariffs were overturned, the Section 301 tariffs (including 25% on lithium batteries) remain, and whether tariffs will make a comeback in the future is still an open question. Tariff uncertainty is a permanent cloud hanging over China's power tools.
Third, dependence on the U.S. and origin risk. Many Chinese power tool firms are too deeply dependent on the U.S. (Chervon at 77%), with a relatively single production base—once tariffs strike, they are battered all over (Chervon saw both revenue and net profit fall). Capacity relocation can hedge tariffs, but building plants overseas requires heavy investment, carries ramp-up risk, and is complex to manage, and the U.S. is still using "transshipment" clauses to plug the "China+1" loophole. Diversity and flexibility in the layout of production bases is a survival capability, but building that capability takes enormous investment and time.
Fourth, overcapacity and involution. The power tool industry has relatively low barriers and a crowded field of firms (Qidong alone has over a thousand), with overcapacity and fierce price wars. A great many small and medium firms are stuck in the low-to-mid end, competing on low prices, with profits as thin as paper. This involution traps the whole industry in a low-margin snare of "the more they grind, the more they lose"—just like tires and much of Chinese manufacturing.
Fifth, channels and market access. U.S. power tool channels are controlled by Home Depot and Lowe's, and it is extremely hard for Chinese firms to break into the mainstream channels—they can only do OEM work or the low end. Add ever-rising certification barriers (UL, CE, lithium-battery safety certification), and the threshold of market access keeps many Chinese small and medium firms out of the compliant, high-end market. Channels and certification are the key crux of China's power tools being "big but not strong" abroad.
Sixth, the soft-power gap in intelligence. China moves fast on the localization of brushless motors, but on the most cutting-edge intelligence (Milwaukee's machine-learning torque control, Hilti's IoT asset-management ecosystem) it is still catching up. Software, algorithms, and ecosystems are China's weak spots relative to European and American brands—and as high-end competition extends from hardware to "hardware + software + ecosystem," this soft-power gap will increasingly affect China's high-end climb in power tools.
Seventh, the sustainability of new tracks such as robotic lawn mowers. OPE electrification and robotic lawn mowers are highlights where Chinese brands overtake on the bend, but sobriety is also warranted—the robotic lawn mower track is red hot with financing (over RMB 1.6 billion in half a year), crowded with players, and fiercely competitive, and it may replay the "hot first, then involuted" pattern of other booms; the EU has already launched an anti-dumping investigation into Chinese robotic lawn mowers (November 2025)—the dividends of the new track also face the dual challenge of tariffs and involution. The window for overtaking on the bend will not stay open forever.
Having finished the list, let us weigh it once more: none of these seven hurdles can negate China's status as the "world's factory" in power tools, but each could slow its pace from "big" to "strong." The real situation of China's power tools, like that of tires, is that of a "hegemon in quantity, a chaser in quality"—it is already the indisputable output hegemon, but it still lags the giants in brand, channels, the high end, and soft power. This gap cannot be leveled instantly by a few highlights like TTI's rise or EGO's ascent; it requires an all-around, long-term catch-up in brand, global footprint, channels, compliance, and intelligence.
Within these seven hurdles hides a dark thread easily obscured by optimism—most of them are not isolated, but intertwined and mutually amplifying. Weak brands (hurdle one) leave firms able only to do ODM OEM work, which in turn reinforces dependence on a single major customer and a single market (the U.S.) (hurdle three); dependence then amplifies the impact of tariffs (hurdle two), and tariffs in turn force price-driven capacity shifts in overcapacity regions (hurdle four)—each link chained to the next. To break out, one cannot simply patch a single hurdle, but must exert force systematically and simultaneously across brand, global footprint, industry chain, compliance, and intelligence. This is precisely what leading firms like TTI, EGO, and Dongcheng are doing, and precisely the systemic capability that the great many small and medium firms stuck in OEM work and involution most lack.
Similar to the judgment on tires as "not yet at the summit, and how to climb," China's power tools are likewise halfway up the value chain—they have topped out in quantity (sixty to eighty percent of the world), and even have highlights like TTI's rise and EGO's OPE dominance, but on brand premium, high-end professional grade, channels, and soft power they are still climbing. Soberly recognizing these seven hurdles is not to negate the achievements of China's power tools, but to remind: from "big" to "strong," China's power tools still have a long way to go. And what will support them the whole way are a complete and powerful industry chain, a vast domestic market, and a group of leading firms climbing toward brand and the high end. To set the climb of China's power tools within a larger frame of reference, a comparison with tires and with other Chinese manufacturing industries is in order.
36. Reference Cases: The Climb of Power Tools, Tires, and Manufacturing
Setting China's power tools within the coordinate system of Chinese manufacturing—comparing them with tires, with shield machines, and with gas turbines—allows a more accurate view of the stage they occupy and the unique opportunities they hold.
Compared with tires: twin climbs at different paces. Power tools and tires are the pair of twin industries that most closely resemble each other in Chinese manufacturing's "big but not strong." The similarities are striking: both are output hegemons (tools sixty to eighty percent, tires about half); both have profits constrained by brands (Milwaukee for tools, Michelin for tires); both have complete and powerful upstream supply chains (globally leading controllers, motors, and cells for tools; molds, equipment, and additives for tires); both are besieged by tariffs (U.S. tariffs on tools, anti-dumping/countervailing on tires); and both are climbing toward brand and the high end. But power tools' climb is slightly faster than tires'—they have more eye-catching breakthroughs like TTI's rise (albeit an American brand with Chinese capital backing), EGO's dominance of North American OPE, and global leadership in robotic lawn mowers; whereas tires' brand breakout has only just begun (only Sailun has entered the global top ten brands). Why are power tools moving slightly faster? The key lies in "new tracks"—OPE electrification and robotic lawn mowers are new tracks whose landscape is undecided, where Chinese brands can overtake on the bend; whereas the tire track is relatively fixed (passenger cars, trucks and buses), making breakthroughs harder. This comparison shows that "finding a new track to overtake on the bend" is a shortcut for Chinese manufacturing from "big" to "strong"—brand breakthroughs are easier to achieve on new tracks whose landscape is undecided than on fixed old tracks.
Compared with shield machines: one halfway up the mountain, one already at the summit. Both power tools and shield machines are industries where China holds a large share (tools sixty to eighty percent, shield machines about seventy percent). But shield machines have "already reached the summit"—they lead the world not only in output but in technology, pushing Europe, America, and Japan to the margins. Power tools are "still halfway up the mountain"—they lead in output, but brand and high-end profits are held by others. The difference lies in the dimension of competition: the buyers of shield machines are professional construction firms (who value technology and delivery, where China already leads), while the buyers of power tools include both professional workers and ordinary consumers (who value brand and reputation, where China is still catching up). Brand is the harder hurdle for power tools than for shield machines—because consumers' brand perception is harder to change than professional buyers' rational judgment. This comparison aligns with the one between tires and shield machines—for any industry that faces consumers and requires brand perception (tires, power tools), China's move from "big" to "strong" is harder and slower; for any industry that faces professional buyers and competes on technology and delivery (shield machines, gas turbines), China's catch-up is faster.
Compared with gas turbines: one with high market barriers, one with a high technology ceiling. Power tools and gas turbines differ in the difficulty of catching up. The gas turbine's difficulty lies in its technology ceiling (the material limit of 1,600 degrees Celsius), where China is still climbing during a window period. The power tool's difficulty lies not in a technology ceiling (tools have no extreme technical limit) but in market barriers—brand, channels, certification, consumer perception. Power tools are "technology relatively conquerable, market barriers formidable," while gas turbines are "technology hard to conquer, market relatively simple." This comparison shows that the obstacles to Chinese manufacturing's move from "big" to "strong" are varied—some are technological (gas turbines), some are market and brand (power tools, tires). And market and brand barriers are often harder and slower to cross than technological barriers, because they depend on the long-term accumulation of consumer trust.
Put the three comparisons together and China's power tools get an accurate positioning—an industry that is an "output hegemon, a brand chaser, with new-track breakthroughs." It moves slightly faster than tires (with overtaking on the bend in OPE and robotic lawn mowers), but like tires it faces the gulf of brand premium; it is not, like shield machines, already at the summit (brand is a harder hurdle for it than for shield machines), nor, like gas turbines, stuck at a technology ceiling (its obstacle lies in market and brand). The unique opportunity for China's power tools to move from "big" to "strong" lies in "overtaking on the bend in new tracks"—OPE electrification and robotic lawn mowers prove that on new tracks whose landscape is undecided, Chinese brands can leap from follower to leader.
This comparison also reveals a general rule for Chinese manufacturing's move from "big" to "strong"—finding one's own unique path. Gas turbines take the road of technological attack (indigenous whole machines), shield machines take the road of manufacturing and standard leadership (world records), tires take the road of technology-and-brand climbing (liquid gold, new-energy supporting), and power tools take the road of overtaking on the bend in new tracks (OPE, robotic lawn mowers) plus platform ecosystems (battery platforms). Each industry's path differs, but all are, on the foundation of "big," finding the direction where they can break through and climbing up the value chain. The unique path of China's power tools is "new tracks + platform ecosystem"—using overtaking on the bend in OPE and robotic lawn mowers to open the high end, and using battery platforms to build a moat. This path is the most hopeful direction for China's power tools to move from "big" to "strong."
The four comparisons can also distill a more abstract rule—the difficulty of Chinese manufacturing's move from "big" to "strong" is highly correlated with "who the buyer is." When the buyer is a professional institution (construction firms for shield machines, power companies for gas turbines) that values technology and delivery, China's catch-up is fast and it easily reaches the summit; when the buyer is an ordinary consumer (car owners for tires, DIY users for power tools) that values brand and reputation, China's catch-up is slow and it gets stuck at the brand hurdle. This rule explains a seemingly contradictory phenomenon: why China tops out faster in "harder" heavy industries like shield machines, high-speed rail, and gas turbines, yet climbs more slowly in "simpler" consumer goods like tires and power tools—because the barrier of the former is technology (which can be tackled), while the barrier of the latter is brand (which can only be accumulated). Technological barriers can be quickly broken through with engineers and capital; brand barriers can only be slowly accumulated with time and reputation—this is a reality that Chinese manufacturing must recognize as it moves from "big" to "strong" in consumer goods.
In this sense, understanding China's power tools is also understanding a sample of Chinese manufacturing's "from big to strong." Its successes (world's factory, TTI's rise, OPE dominance) prove the strength of Chinese manufacturing's catch-up ability; its worries (brand weakness, tariff siege, channel barriers) foreshadow the difficulty of Chinese manufacturing climbing in the dimensions of brand and market. And its unique opportunity (overtaking on the bend in new tracks) offers all Chinese industries seeking to move from "big" to "strong" a path worth learning from—seizing position first on new tracks whose landscape is undecided, and achieving the leap from follower to leader.
37. Conclusion: The Next Leg for the Hidden Champions
Gathering the threads of this report together, the story of China's power tools is a story of "how hidden champions move from the world's factory to world brands."
Looking back at the present, this is a picture full of tension. On one hand, China's power tools are the indisputable world's factory: sixty to eighty percent of global output, USD 9.758 billion in exports, the hidden empire of Qidong and Wuyi, TTI's rise, EGO's dominance of North American OPE, and global leadership in robotic lawn mowers—by output and certain breakthroughs, China's power tools are already a dominant global force. On the other hand, China's power tools are also an awkward brand chaser: the brand premium and profits of the high-end professional grade remain largely in the hands of Milwaukee, Bosch, Makita, and Hilti; a great many Chinese firms are stuck in OEM work and the low-to-mid end, earning meager processing fees. The paradox of "world's factory, others' brands" is the most core feature of this hidden industry, and the knot it must untie to move from "big" to "strong."
But China's power tools in 2026 are climbing this paradox along multiple lines at once. On the technology side, the cordless transition and platformization have reshaped competition, and TTI's "cordless dominance" and EGO's 56V platform have built moats. On the market side, overtaking on the bend in OPE electrification and robotic lawn mowers has let Chinese brands dominate the North American market on new tracks—Segway-Ninebot, Mammotion, and Ecovacs have turned robotic lawn mowers into globally leading Chinese smart products. On the industry-chain side, the hidden champions in controllers, motors, cells, and switches form the most solid bedrock of China's power tools, and Chinese cells are displacing Japan and Korea to supply top global brands. On the brand side, Dongcheng has ranked first in domestic sales for 12 consecutive years, EGO has become a leader in North American OPE, and a Sailun-style brand breakout is also playing out in the power tool industry. On the capital side, Positec has completed its first round of financing, and Zhongce has gone public (adjacent)—capital is empowering leading firms. The combined force of these five lines is gradually rewriting the paradox of "world's factory, others' brands."
But the road of the climb is still long, and very steep. The gulf of brand premium, the tariff roller coaster, the risk of U.S. dependence, the involution of overcapacity, the barriers of channels and certification, the soft-power gap in intelligence, the sustainability of new tracks—seven hurdles lie ahead, each requiring a long-term, all-around crossing. China's power tools moving from "big" to "strong" is not a leap that can be completed in an instant by a few highlights like TTI's rise or EGO's ascent, but a long process of continuous climbing in brand, global footprint, channels, compliance, and intelligence.
It is worth emphasizing that the climbing road of China's power tools, like that of tires and much of Chinese manufacturing, is a microcosm of "Made in China" as a whole moving from "big" to "strong." World's factory, brand weakness, constrained profits, tariff siege—this predicament is a shared portrait of Chinese manufacturing across many industries; and the breakout paths China's power tools are attempting (the cordless transition and platformization, overtaking on the bend in new tracks, industry-chain autonomy, brand climbing, smart manufacturing) carry reference value for all Chinese industries seeking to move from "big" to "strong." Its unique breakthrough in particular—the "overtaking on the bend in new tracks" of OPE electrification and robotic lawn mowers—offers Chinese manufacturing a precious lesson: seizing position first on new tracks whose landscape is undecided makes the leap from follower to leader easier to achieve than slugging it out on fixed old tracks.
The points to watch in the coming years are already clear: whether TTI's cordless dominance can be sustained and whether Milwaukee's brand power can keep leading; whether EGO can expand its leading edge in North American OPE to the whole world and become a true world brand; whether the overtaking on the bend in robotic lawn mowers can weather the EU anti-dumping probe and track involution and lock in China's lead; whether the battery-platform ecosystem can be built by more Chinese firms, moving from "selling tools" to "building ecosystems"; and that most fundamental question—whether the gulf of brand premium can be filled bit by bit, so that China's power tools not only make a lot but sell dear and sell brands. The answer to each question determines whether China's power tools can truly turn from "world's factory" into "world brand."
For different readers, this report is used differently. For enterprises along the industry chain, the cordless transition, battery platforms, OPE electrification, robotic lawn mowers, and tool IoT—these are the opportunity directions with the highest certainty over the next five years, worth matching against your own capabilities to find an entry point. For investors, please take "having a brand, having global production bases, having new-track breakthroughs" as three criteria for screening leading firms, and keep an eye on the three leading indicators of tariffs, rate cuts, and overseas capacity ramp-up. For policy observers, the upgrade of China's tool-industry cluster (Qidong, Wuyi) from a "manufacturing cluster" to a "manufacturing + R&D + brand cluster" is the key to judging whether this industry can move from big to strong. For general readers, we hope these fifty thousand words have made one thing clear: that unremarkable tool lying in your garage, on your belt, or in your lawn mower is backed by a quiet yet profound global comeback of Chinese manufacturing.
The story of manufacturing is, in the end, a story about patience and accumulation. China's power tools took several decades to reach first place in the world in output—that is a victory of "quantity"; but reaching "quality" strength—brands trusted, profits not at the bottom, a seat at the high end—may take another few decades, and harder ones at that, because the climb of "quality" has no shortcut and can only be built up product by good product, reputation by good reputation, inch by inch of brand trust. Yet China's power tools also have their unique hope—overtaking on the bend in OPE, platform ecosystems, industry-chain autonomy—breakthroughs that make their climb slightly faster than tires' and more methodical than that of many industries.
From world's factory to world brand, from hidden champions to global leaders, China's power tools are walking this long and steep road. They have already proven that they can make the most tools, can overtake on the bend in new tracks, and can build the complete bedrock of the industry chain; what they must prove next is that they can make the most trusted brands, can compete head-on with century-old giants at the high-end professional grade, and can convert the scale advantage of the "world's factory" into the value advantage of "world brands." Every step of this road is worth sustained attention. The Tianxia Gongchang Industry Research Institute will continue to track every key node of this hidden yet important industry.
Data Sources and Main References
A few notes on methodology and calibration: all data in this report come from public financial reports, government documents, industry statistics, and authoritative media coverage, cross-verified across multiple sources before writing; unconfirmed rumors are never used. Financial data take the FY2025 annual reports and the latest 2026 quarterly reports as the baseline, while industry, tariff, and policy data are updated to July 2026; where multiple statistical calibrations exist for the same indicator (such as global market size, China's output share, and domestic market size), each is noted in place in the text. Main sources include:
- Tianxia Gongchang industrial platform—China factory database and industry-chain data (covering 4.8 million Chinese manufacturing plants)
- Techtronic Industries (TTI), Stanley Black & Decker, Bosch, Makita, Hilti—FY2025 annual and quarterly reports
- Chervon Holdings, Great Star Tools, Greenworks, Kingclean/Ken, Dongcheng, Positec—2025 annual reports and announcements
- U.S. Supreme Court, the White House, USTR, U.S. Department of Commerce—Section 301 tariffs, reciprocal tariffs, IEEPA ruling, and other trade and policy documents
- EVTank, Qianzhan Industry Research Institute, Fortune Business Insights, Grand View Research—global and China power tool market size and cordless-transition data
- General Administration of Customs—China power tool export data
- World Economic Forum (WEF)—"Lighthouse Factory" certification information (Guizhou Tire)
- OpenBrand, Mordor Intelligence—North American OPE and robotic lawn mower market share and size
- Segway-Ninebot, Ecovacs, Mammotion, and others—robotic lawn mower business data
- Jiangsu and Zhejiang local governments and industry media—industrial-belt data for Qidong, Wuyi, and others
- Tenpower, EVE Energy, ATL New Energy, and others—power tool battery-cell supply-chain information