The top manufacturer of electric vehicle batteries globally, the Chinese company CATL, reported a significant 32.9 percent increase in their first-quarter profits, despite the slowdown in demand for electric vehicles.
The company manufactures over one-third of all electric vehicle (EV) batteries sold globally, working together with leading brands such as Tesla, Mercedes-Benz, BMW, and Volkswagen.
Established in 2011 in the eastern Chinese city of Ningde, CATL (Contemporary Amperex Technology Co., Limited) quickly rose to prominence due to swift expansion within the local market.
The net profit for the initial quarter surged by 32.9 percent compared to the previous year, reaching 13.96 billion yuan ($1.91 billion). This information was disclosed in a statement published by CATL on the Shenzhen Stock Exchange on Monday.
In the same timeframe, CATL experienced a 6.2% increase in sales compared to the previous year, reaching 84.7 billion yuan, as indicated in the filing.
CATL has received significant financial backing from Beijing, which has aimed to bolster domestic capabilities in specific advanced technology areas over the past few years.
However, after several years of brisk expansion, the globe’s biggest electric vehicle marketplace is now experiencing indications of weakening sales due to an overall deceleration in consumer spending.
In January, CATL cautioned that their decrease in sales throughout the previous year was probably because of a “drop in the costs of raw materials like lithium carbonate,” leading the company to revise its pricing strategies.
In the previous year, lithium prices dropped considerably, largely because of an excess supply in the market and reduced consumer interest in electric vehicles.
These trends have ignited an intense pricing battle within the nation’s vast electric vehicle market, subjecting smaller companies to significant pressure as they strive to stay competitive while maintaining financial stability.
CATL is constructing its second facility in Hungary following the launch of its initial plant in Germany in January 2023.