EV battery giant CATL’s earnings outlook brightens as it extends market share
The release of two European-targeted battery packs improves the earnings prospects for the world’s largest EV battery producer
The release of two electric vehicle (EV) battery packs targeted specifically at the European market has brightened the earnings outlook for Contemporary Amperex Technology (CATL) whose market share jumped in China last month.
Fujian-based CATL, the world’s largest EV battery producer, delivered 26.45 gigawatt-hours (GWh) of batteries in August, up 26 per cent from the previous year.
Its share of the domestic market hit 42.4 per cent for the month, up from 41.4 per cent in July, according to the China Automotive Battery Innovation Alliance (CABIA).
BYD, the world’s largest EV assembler and also a battery manufacturer, was a distant second, holding a 20.9 per cent share of the mainland market.
One GWh of battery power can charge about 20,000 electric cars with a driving range of 500 kilometres each.
Davis Zhang, a senior executive at Suzhou Hazardtex, a supplier of specialised batteries, said:
CATL is powering ahead, banking on its production and technological advantages,
“With its stable growth at home, investors are now expecting the company to accelerate expansion abroad.”
CATL closed up 7.4 per cent to HK$465 in Hong Kong on Monday, while its Shenzhen-listed shares surged 9 per cent to close at 354.70 yuan.
The rise in CATL’s market share on the domestic market came as China’s EV battery producers registered a surge in volume in August, climbing 32.4 per cent on the previous year to 62.5 GWh, data from the CABIA showed.
Earlier this month, CATL unveiled two battery packs for European clients such as BMW and Volkswagen as it neared the opening of its new plant in Hungary in December.
The first pack is a long-life variant usable for up to 12 years, which offers 758 kilometres (471 miles) of driving range. The second variant is a fast-charging power pack that requires just 10 minutes of charging to drive up to 478 kilometres.
At present, CATL’s sales outside the mainland account for about 30 per cent of its global total. The battery giant, which completed a US$5.22 billion initial public offering in Hong Kong in May, said the proceeds of the IPO would be used to help fund its overseas factories.
Morgan Stanley said in a research report on Thursday that CATL’s share of the European market was set to increase significantly. JPMorgan, meanwhile, has upgraded it to overweight on the back of its strong earnings prospects, it said in a research note released on Sunday.
CATL is expected to begin production at its €7.3 billion (US$8.6 billion) factory in Debrecen, the second-largest city in Hungary, at the end of 2025. The plant has 100 GWh of production capacity.
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EV battery giant CATL’s earnings outlook brightens as it extends market share, source
