Chinese power battery giant CATL enjoyed significant growth in profit in the second quarter of 2023, primarily driven by soaring electric vehicle sales worldwide.
Notably, CATL’s strong quarterly performance may have also been driven by the stabilizing critical material costs, such as lithium.
CATL’s net income and revenue figures in Q2 2023
Bloomberg indicated that CATL ultimately surpassed analysts’ forecasts with net income growth of 63% to 10.9 billion yuan ($1.5 billion). Likewise, its revenue surged 56% to 100 billion yuan, demonstrating the Chinese company’s dominance in the global battery industry.
For context, Tesla is one of CATL’s top customers. In fact, it contributed a notable 12% of the Chinese battery maker’s revenue during this quarter, per Bloomberg’s data compilation.
CATL has also formed partnerships with other major players like Ford, Volkswagen, Hyundai, Nio, etc. As a result, it has advanced as the leading battery maker globally.
According to the report, CATL had a market share of 36.3% from January to May 2023. It represents an increase of 1.7 percentage points from last year’s record, SNE Research noted.
For reference, its Chinese rival BYD accounted for 16.1% of the global EV battery market.
As mentioned, CATL’s unprecedented dominance this quarter can be attributed to the easing of lithium costs after substantially surging in the previous year. The report noted that China’s lithium carbonate prices have dropped 50% from 2022, lessening the cost pressures on battery makers like CATL.
The company’s share surged to a record of 3.4% on Tuesday since June 15.
Experts outlooks
Bloomberg Intelligence experts suggest that CATL can potentially maintain its record sales growth through the second half of the year owing to the dropping lithium costs.
Additionally, China’s demand for batteries continues to increase amid the wider adoption of electric cars. Chinese automakers have been launching new models as the government extended the zero purchase tax.
Furthermore, CATL’s global footprint will also aid the company in raising its sales and revenue. It would be unsurprising, given that the battery giant already hit a net income of 20.7 billion yuan and 189 billion yuan in revenue in the first half of 2023. Its gross margins also surged to 21.6%, indicating a three percentage point year-on-year.
Notably, CATL’s key power battery unit accounted for a whopping 74% of its H1 2023 revenue with its 139 billion yuan of sales.
See Also:
- Ford announces plans to license CATL’s electric vehicle battery technology
- Ford and CATL contemplate constructing a battery plant in the US
- Tesla may soon develop a new battery production plant in the US with its major supplier CATL
- CATL starts mass production of upgraded Qilin battery in China
- Ford and a Chinese partner plan to construct an EV battery plant in Michigan
CATL aims to sustain its dominant position by building a $7.6 billion battery plant in Hungary, which may hit a production capacity of 100 gigawatt-hour.
American legacy automaker Ford will also license CATL’s electric vehicle battery technology for the planned $3.5 billion production site in Michigan.
Remarkably, CATL’s overseas revenue surged to 35.5% in H1 2023, indicating a notable growth from 2022’s record of 25%. The company’s strong performance so far this year demonstrates its solidifying presence in the global market.
