Credit：Visual China

CATL missed analysts’ expectation both the top and bottom line in the quarter ended September 30.  The battery giant posted revenue of RMB105.431 billion (US$14.4 billion), increasing 8.28% year-over-year (YoY), and net income of RMB10.428 billion with a 10.66% YoY growth. Financial results showed significant slowdown compared with the second quarter, when the company recorded a 55.86% YoY increase in revenue and a 63.22% YoY increase in net income. On the quarter-over-quarter (QoQ) basis, the revenue rose 5.21% while the net income dropped 4.28% in the third quarter.

The latest quarterly earnings signaled CATL is poised to be overtaken by BYD, its arch rival in electric vehicle (EV) battery sector. BYD preliminarily estimated net income in the third quarters to reach between RMB9.546 billion and RMB11.546 billion, with a YoY increase between 67% and 101.99%.

Slowdown of earnings may result from overcapacity and decline in market share. In the first half of the year, CATL’s capacity utilization rate decreased to 60.5%, 20.5 percentage points down from a year ago. 

Data from the industry body showcased CATL continued losing market share in its home market. CATL’s batter installation volume in China stood at 14.35 gigawatt-hours (GWh) in September, China Automotive Battery Innovation Alliance (CABIA) estimated. While the company maintained the first place in terms of battery output, its market share dropped to 39.41% that month, the lowest since May 2022. 

Though CATL is still the No.1 manufacturer as its power battery usage jumped 54.2% YoY to 25.3 GWh in August, its global market share fell to 38%, down 1.3 percentage points from the same month last year, according to the South Korea-based market research firm SNE Research. From January to August, CATL’s battery installation rose 79.1% to 158.3 GWh with a global share of 36.9%. Its share in markets beyond China had a steady growth, and obtained 34.9% in Europe, among others, up 8.1 points YoY. 

People in the industry believed that a possible reason for CATL’s recent decline in market share is the cooling sales of Tesla, the battery maker’s biggest client, reported the International Finance News, a financial newspaper under China’s state media People’s Daily.

Unlike the second largest battery maker BYD, which powers all its EVs its own batteries, CATL has to rely on automobile companies’ orders to boost its battery installation. Tesla is the brand that posted biggest decline in September among the top ten automakers in China. Retail sales of Tesla China slumped 43.9% YoY to 43,507 vehicles that month, representing a 32.7% month-over-month decrease, according to the China Passenger Car Association (CPCA).

CATL is facing more competitions from emerging domestic rivals. EVE Energy Co., Ltd. is the manufacturer with strongest growth in the first eight months of the year. Its battery installation volume surged 182.8% YoY, according to SNE Research, EVE could win BMW Group’s nearly 70 GWh capacity of EV battery order in China as BMW will choose from EVE and CATL, Chinese digital news media outlet 36Kr learned recently. BMW has awarded last year contracts worth of “two-digit billion-euro” to CATL and EVE Energy, with the aim to produce the newly-developed cylindrical battery cells. The German auto manufacture said the new cells will be equipped with its next generation full electric model under an architecture called Neue Klasse, or New Class, starting from 2025.

36Kr also learned SVOLT Energy Technology Co., Ltd, a battery unit of Great Wall Motors, has signed a contract to supply the capacity totaled nearly 90 GWh for BMW‘s EVs made in Europe, Chinese digital news media outlet 36Kr learned from several industry sources. The contract is worth of RMB96 billion (US$13 billion) based on the unit price of RMB0.6 per watt hour.

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