Contemporary Amperex Technology (CATL) is one of the largest manufacturers of batteries on the planet, already supplying The Blue Oval with EV batteries – and it will soon license technology to Ford that will enable it to build lithium iron phosphate units at its future BlueOval Battery Park Michigan site, too. CATL has thus far seemingly weathered the storm of weaker than expected demand for EVs as well, posting a Q2 profit and seemingly unfazed by higher tariffs imposed on Chinese imports in the U.S. However, that success didn’t continue in the third quarter, it seems.
According to Bloomberg, CATL fell short of meeting its net income target in Q3. Even though that figure actually increased by 26 percent to 13.1 billion yuan ($1.8 billion USD) year-over-year in the third quarter, net income was expected to reach 14.7 billion yuan ($2.06 billion USD). The same was true of revenue, which decreased by 12.5 percent to 92.3 billion yuan ($12.976 billion USD) year-over-year, compared to projections for 118.4 billion yuan ($16.646 billion USD).
This disappointing performance reportedly stems from slowing demand for EVs, as well as declining sales in certain markets such as Germany and Japan, which has prompted automakers like Ford to scale back orders for batteries. CATL isn’t alone in facing these struggles either, as LG Energy Solution is also expects to post a profit decline in Q3 – which would mark the third straight quarterly drop in profit for that company.
Regardless, CATL still dominates the market with a 37.1 percent global share, which is 1.6 percent higher than a year ago. That size gives it a big advantage in terms of the supply chain and its ability to drive down costs from its suppliers, and its energy storage business is growing, too. Coupled with a sizable 44 percent market share in its home market of China, CATL formerly posted a net profit of 36 billion yuan on revenue of 259 billion yuan through September as well.
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