The well-known battery producer reported a net profit of 6.68 billion CNY (USD 974.61 million) in Q2 2022, up 164% from a year ago. Its revenue surged to 64.29 billion CNY in the three-month period, from 24.91 billion CNY a year ago.
CATL, the world’s largest electric vehicle (EV) battery manufacturer, more than doubled its profit in the second quarter as China rolled out incentives to boost EV sales to cushion the impact of lockdowns during the period. It gained a net profit of 6.68 billion CNY (USD 974.61 million) in Q2 2022, up 164% from a year ago. Its revenue surged to 64.29 billion CNY in the three-month period, from 24.91 billion CNY a year ago.
According to CATL itself, the lockdowns in several cities, including Shanghai, had some impact on its domestic market. Demand, however, remained strong as local authorities rolled out incentives to promote EV sales and companies launched new models. EV sales growth bucked an overall trend of weakening auto sales in the major markets of China, Europe and the United States, which were hit by COVID and supply chain issues, CATL said.
According to the China Association of Automobile manufacturers in China, EV sales surged 120% in the first half, while overall vehicle sales fell 6.6%. Rising metal prices, especially lithium, however, weighed on CATL’s profit margin on EV batteries, which fell to 15.04% from 22% at the end of 2021. The company said it had taken measures, including signing long-term contracts with suppliers, recycling materials and negotiating a dynamic battery pricing scheme with automakers to ease the pressure of rising costs. The company is also accelerating its expansions in overseas markets with contracts to supply batteries to clients, including Mercedes-Benz and BMW in Europe and Ford in the United States, where government incentives are driving demand for EVs.