Net profit for the three months ended June came in at 10.895 billion yuan ($1.53 billion), up 63.22% from a year earlier, according to a Reuters calculation based on CATL’s company filing. This compared with a 558% surge in its net profit in the first quarter.
China’s battery makers including CATL are facing challenges of weakening demand and bigger cost reduction pressure from 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 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.
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CATL is shadowed by a capacity glut with 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 U.S. 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.
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