BEIJING, April 15 (Reuters) – Chinese electric vehicle battery giant CATL posted first-quarter results that surpassed expectations on Wednesday, strengthening its market dominance even as EV demand softens.
CATL’s first-quarter net profit grew 48.5% from a year earlier to 20.7 billion yuan ($3.03 billion), versus a 57.1% increase in the fourth quarter, a stock exchange filing showed.
That beat estimated growth of 20.9% in a poll of three analysts compiled by LSEG.
Revenue rose 52.5% to 129.1 billion yuan, against a 36.6% increase in the fourth quarter and above four analysts’ forecast of a 35.7% gain.
CATL has been expanding capacity for producing batteries for energy storage systems (ESS), betting on robust growth in demand as more countries seek faster development of renewables after the Iran war led to a spike in global energy costs.
ESS battery shipments jumped 80% year-on-year last year to give CATL a 30% share of the global market, SNE Research said.
EV batteries remain the largest revenue contributor to CATL, which has maintained its global leadership thanks to a diversified customer portfolio including Tesla, Seres and Toyota.
CATL expanded its lead in the first two months with a 42.1% share of global EV battery usage from 38.7% in the year-ago period, SNE Research data showed.
Second-ranked BYD’s share fell to 13.4% globally from 16%, as its vehicle sales at home extended declines.
However, Vincent Sun, a senior equity analyst at Morningstar, said automakers’ dual-sourcing and cost-cutting will “dilute CATL’s pricing power and pressure its unit profit”.
EV sales in China, the world’s largest auto market, continued to feel the impact of reduced incentives last month amid a sputtering economic recovery, despite robust exports.
($1 = 6.8205 Chinese yuan renminbi)
(Reporting by Qiaoyi Li, Zhang Yan and Ju-min Park. Editing by Mark Potter and Alexander Smith)
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