Chinese battery giant CATL saw profits jump more than 63% in the second quarter of the year, taking its income for the first half of the year to record highs despite slowing demand and increasing competition.
The battery-maker’s filings on Tuesday showed it clocked net profits worth 10.895 billion yuan ($1.53 billion) for the three months ending June. According to a report by the Financial Times, that put the company’s first-half profits at 20.7 billion yuan ($2.9 billion) – 154% higher than the same period last year.
Despite the record profits, CATL saw Q2 income growth slow down overall, having recorded a 558% surge in its net profit in the first quarter.
Also read: India Turns Down BYD’s $1-Billion EV, Battery Plant Proposal
China’s battery makers, including CATL, are facing challenges of weakening demand and bigger cost reduction pressure from electric vehicle (EV) makers amid a price war and a slowdown in auto sales this year.
The EV battery market grew at a much slower pace this year with a 36.8% increase in battery installation volume in the first half compared with the 176.4% growth in the same period in 2022, data from China Automotive and Battery Alliance showed.
CATL, which counts Tesla as its biggest client, has also been losing market share to BYD, a major automaker that powers all its EVs with its own batteries.
Automakers such as Chongqing Changan Automobile and Guangzhou Automobile Group also sourced more batteries from smaller suppliers to reduce costs.
CATL is shadowed by a capacity glut at its production facilities as the utilisation rate dropped to 60.5% in the first half from 81.25% in the same period a year ago.
The Chinese company also faces headwinds in efforts to expand globally, including an investigation by US lawmakers into its partnership with Ford Motor in the United States.
CATL, however, extended its lead in the global EV battery market as its share increased to 36.3% in the first five months compared with 34.6% a year ago, according to data from SNE Research.
South Korea’s LG Energy Solution, which followed CATL and BYD with a share of 13.9%, forecast a 213% operating profit jump in the second quarter.
- Reuters, with additional inputs from Vishakha Saxena
Also read:
CATL Says It’s Made Cold Weather EV Battery Breakthrough
China’s CATL Eyes Condensed Matter Battery for Planes, EVs
China’s CATL to Mass Produce Cheaper M3P Batteries This Year
Beijing Regulator Delays CATL’s $5 Billion Swiss GDR Listing
China’s Xi Admits Mixed Feelings on CATL’s EV Battery Success