CATL profit rises, defying gloom among rival EV battery makers
CONTEMPORARY Amperex Technology Co (CATL), the world’s biggest maker of electric vehicle (EV) batteries, reported a rise in second-quarter net income, bucking the weaker-than-expected performance from top rival LG Energy Solution.
For the three months ended June, profit rose 13.4 per cent to 12.4 billion yuan (S$2.3 billion), according to Bloomberg News calculations, beating analyst estimates. Net income for the first half increased 10.4 per cent to 22.9 billion yuan, according to a Shenzhen Stock Exchange filing on Friday (Jul 26).
A key Tesla supplier, CATL maintains a clear lead in battery-making globally. Its market share rose to 37.5 per cent in May, 2.3 percentage points higher year on year, according to SNE Research data. Within China, the biggest EV market in the world, CATL’s share stands at 45 per cent, China Automotive Battery Innovation Alliance data showed.
The Ningde, Fujian-based company’s shares closed 0.9 per cent higher in Shenzhen on Friday, taking gains to 16 per cent this year. The Bloomberg electric vehicle price return index, which includes EV makers, battery manufacturers and other parts suppliers, is down 25.3 per cent over the same period.
Tumbling costs of the raw materials that go into batteries have pushed cell prices lower, sparking a new price war among industry players. CATL revenue in the second quarter fell 13.2 per cent to 87 billion yuan. The first half performance posted a 12 per cent fall to 166.8 billion yuan.
CATL’s scale and vertical integration have put it in a better position to compete on cost and cut battery prices.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
While its business performance remains robust, No 3 player LG Energy has struggled, on Wednesday slashing its annual sales target. The South Korean battery maker posted a 23.7 billion won (S$23 million) second quarter net loss, compared to analyst estimates of a 13 billion won profit.
Demand for EVs is slowing globally, but particularly in the US the Europe, hurting legacy automakers like Volkswagen, Mercedes-Benz Group and General Motors, which CATL counts as big customers.
Porsche became one of the latest auto brands to abandon its EV sales targets, while Ford Motor has redirected EV investments into bolstering its profitable combustion engine pickup truck.
Ford has a licensing agreement with CATL to make low-cost lithium-ion batteries by 2026 at its plant in Michigan using CATL technology, although there have been some geopolitical concerns over that relationship. BLOOMBERG
Share with us your feedback on BT's products and services
