China's CATL sees slowest profit growth in six years
Technology
China's CATL sees slowest profit growth in six years
BEIJING (Reuters) - CATL reported 15% growth in 2024 net profit, the slowest pace in six years, as a prolonged price war in China's electric vehicle market put pressure on the Chinese EV battery giant.
Net profit rose 15% to 50.7 billion yuan ($7.01 billion), according to a stock filing on Friday, versus the company's forecast of 11.1%-20.1% growth.
Revenue came in at 362 billion yuan, down 9.7%, the first annual revenue fall since CATL started releasing its operating figures in 2015.
Adjusted product prices for declining costs of raw materials such as lithium carbonate resulted in a fall in operating income despite rising sales volume, the company said in January.
Fourth-quarter net profit was up 13.6% year-on-year to 14.7 billion yuan, slowing from 26% growth in the third quarter, while revenue shrank by 3.1% to 103 billion yuan, narrowing from a 12.5% slide in the previous quarter and the fifth consecutive quarterly decline.
A prolonged price war in China has pressured EV makers to lower the costs of components, forcing CATL to lower battery prices to defend its market share.
This was partly offset by a decline in battery material costs for CATL, and the company saw a 17.6% slide in the cost of power battery business over last year, faster than a 11.3% fall in revenue from the biggest source of its revenue.
CATL further extended its lead in the global market of batteries for both EVs and energy storage systems with a 38% share, up from 36% in 2023, according to SNE Research. BYD held the second place with 15% in both 2023 and 2024, while LGES saw its share dip to 10% from 13%.
CATL saw faster growth in deliveries of batteries for energy storage systems, which accounted for 22.4% of its total battery shipments in 2024 compared to 19.4% in 2023, data from SNE Research showed.
The EV battery specialist has been pushing beyond batteries, unveiling a new EV chassis in December and envisioning a pivot to power grids.
Additionally, it's pursuing investments abroad, including a 7.3 billion euro battery plant in Hungary to supply the likes of Mercedes-Benz and BMW, along with a new jointly-owned battery plant with Stellantis in Spain.
The company applied last month for a listing in Hong Kong that will partially fund its Hungarian plant, in a deal expected to raise at least $5 billion.
