Chinese battery giant CATL profit jumps as it ramps up output

China's CATL, the world's largest electric vehicle (EV) battery maker, said on Friday (Oct 21) its third-quarter profit nearly tripled, buoyed by rapid expansion in production to power the growth of EVs worldwide.

CATL, whose clients include Tesla, Volkswagen and BMW, booked a net profit of 9.4 billion yuan (S$1.85 billion) from July to September, according to a company filing to the Shenzhen stock exchange.

Revenue increased 232.5 per cent in the three-month period to 97.4 billion yuan from a year before, the company said.

The result is largely in line with an estimate provided by the company last week.

CATL, which supplies one of every three EV batteries sold globally, is expected to double deliveries this year amounting to 300 gigawatt hours (GWh), according to analysts at Soochow Securities.

Its profitability is also likely to improve thanks to its investments in battery metals and an expected increase in lithium output next year, they added.

CATL has accelerated its expansion into overseas markets with contracts to supply batteries to major carmakers including Mercedes Benz Group and BMW in Europe and Ford Motor in the United States, where government incentives are driving demand for EVs.

The Chinese firm announced in August that it would build a US$7.6 billion battery plant in Hungary, which would be Europe's largest.

But the company has slowed its planning for investment in battery plants in North America due to concerns that new US rules on sourcing battery materials will drive costs higher, Reuters reported on Friday.

To offset rising costs of battery materials, CATL has taken measures including signing long-term contracts with suppliers, recycling materials and negotiating a dynamic battery pricing scheme with automakers.

CATL's shares closed down 0.48 per cent in Shenzhen. The blue-chip CSI 300 index lost 0.3 per cent.  REUTERS



BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to