Battery giant CATL posts slower profit growth as competition heats up

Chinese battery big CATL recorded slower development in internet revenue for the second quarter, as the corporate scrambled to keep up its business management amid intensifying competitors within the electrical car battery market.

Net revenue for the three months ended June got here in at 10.895 billion yuan ($1.53 billion), up 63.22% from a yr earlier, in keeping with a Reuters calculation based mostly on CATL’s firm submitting. This in contrast with a 558% surge in its internet revenue within the first quarter.

China’s battery makers together with CATL are dealing with challenges of weakening demand and greater value discount strain from EV makers amid a worth conflict and a slowdown in auto gross sales this yr.

The EV battery market grew at a a lot slower tempo this yr with a 36.8% improve in battery set up quantity within the first half in contrast with the 176.4% development in the identical interval in 2022, information from China Automotive and Battery Alliance confirmed.

CATL, which counts Tesla as its largest shopper, has been dropping market share to BYD, a serious automaker that powers all its EVs with its personal batteries.

Automakers akin to Chongqing Changan Automobile and Guangzhou Automobile Group additionally sourced extra batteries from smaller suppliers to cut back prices.

CATL is shadowed by a capability glut with its manufacturing amenities because the utilisation charge dropped to 60.5% within the first half from 81.25% in the identical interval a yr in the past. The Chinese firm additionally faces headwinds in efforts to increase globally, together with an investigation by U.S. lawmakers into its partnership with Ford Motor within the United States.

CATL, nevertheless, prolonged its lead within the international EV battery market as its share elevated to 36.3% within the first 5 months in contrast with 34.6% a yr in the past, in keeping with information from SNE Research.

South Korea’s LG Energy Solution, which adopted CATL and BYD with a share of 13.9%, forecast a 213% working revenue soar within the second quarter.

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