Chinese battery giant CATL posts strong Q2 profit on robust EV sales
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[August 24, 2022] SHANGHAI
(Reuters) - CATL, the world's largest electric vehicle (EV) battery
manufacturer, more than doubled its profit in the second quarter as
Chinese authorities rolled out incentives to boost EV sales to cushion
the impact of lockdowns during the period.
CATL, whose clients include Tesla, Volkswagen and BMW, booked a net
profit of 6.68 billion yuan ($974.61 million) from April to June,
according to Reuters calculations based on the company's filings, up
164% from a year ago.
Revenue also surged to 64.29 billion yuan in the three-month period,
from 24.91 billion yuan a year ago, Reuters calculations showed.
The company said that a COVID outbreak during the period, which included
lockdowns in several cities including Shanghai, had some impact on its
domestic market. Demand, however, remained strong as local authorities
rolled out incentives to promote EV sales and companies launched new
models.
EV sales growth bucked an overall trend of weakening auto sales in the
major markets of China, Europe and the United States, which were hit by
COVID and supply chain issues, CATL said.
![](http://archives.lincolndailynews.com/2022/Aug/24/images/ads/current/charrons_bch_2022.png)
In China, EV sales surged 120% in the first half, while overall vehicle
sales fell 6.6%, according to the China Association of Automobile
Manufacturers.
Rising metal prices, especially lithium, however, weighed on CATL's
profit margin on EV batteries, which fell to 15.04% from 22% at the end
of 2021.
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![](../images/082422PIX/busine51.jpg)
People walk past the R&D centre of
Contemporary Amperex Technology Ltd (CATL) in Ningde, Fujian
province, China, December 16, 2016. REUTERS/Jake Spring
![](http://archives.lincolndailynews.com/2022/Aug/24/images/ads/current/graue_22SILVERADO_061822.png)
CATL said it had taken measures including signing long-term contracts with
suppliers, recycling materials and negotiating a dynamic battery pricing scheme
with automakers to ease the pressure of rising costs.
The company is also accelerating its expansions in overseas markets with
contracts to supply batteries to clients including Mercedes-Benz and BMW in
Europe and Ford in the United States, where government incentives are driving
demand for EVs.
It announced earlier this month that it would build a $7.6 billion battery plant
in Hungary, Europe's largest so far.
CATL's market share in the global EV battery market reached 34.8% in the first
half, extending its lead with a 6.2 percentage points increase from a year ago,
according to data from SNE Research.
South Korea's LG Energy Solution, which posted a 73% plunge in the second
quarter profit, followed CATL with a share of 14.4%.
($1 = 6.8540 Chinese yuan renminbi)
(Reporting by Zhang Yan and Brenda Goh; Editing by Jamie Freed)
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