Contemporary Amperex Technology Co. reported an 83 percent jump in revenue that well outdid market expectations, fueled by climbing demand for cleaner vehicles and falling raw materials costs.
Sales at the world’s biggest maker of battery cells for electric vehicles came in at 89 billion yuan ($13 billion) for the three months ended March 31, according to an exchange statement Thursday, better than the 75.1 billion yuan forecast by analysts.
Net income at the Tesla Inc. supplier was 9.8 billion yuan, up from 1.5 billion yuan the previous corresponding quarter when an extraordinary first-quarter derivatives charge shrank earnings.
CATL also said it plans to raise 4 billion yuan in capital via its units for projects in Indonesia. The resource-rich Southeast Asian nation is home to many of the precious ingredients found in EV batteries.
In April last year, CATL said it plans to join PT Aneka Tambang and PT Industri Baterai Indonesia on a project that spans everything from nickel mining to battery materials, recycling and an EV batteries factory. CATL founder Yuqun Zeng said at the time the project, to be based in the country’s North Maluku province, would “become an emblem of the everlasting friendship between China and Indonesia.”
Ahead of CATL’s results, Bloomberg Intelligence analysts including Joanna Chen said higher battery sales and falling lithium costs would probably bolster the company’s financials. Batteries’ key ingredient of lithium carbonate has fallen by more than half after hitting a peak in November.
Ningde, Fujian-based CATL also remains in a comfortable position globally as the world’s market leader with an almost 34 percent share based on data for first two months of this year, according to SNE Research. Its nearest competitor is BYD Co., with 18 percent.
Its dominance was on display at China’s premier auto show this week in Shanghai, where both local and international automakers showed renewed vigor after China’s punishing Covid lockdowns and restrictions.
At the show, CATL unveiled a new battery technology that could eventually have enough energy density to power an electric aircraft, it claimed. The condensed state battery will initially start to be mass produced later this year, but at a lower density for EVs.
More broadly in China there is a car price war, started by Tesla amid slightly subdued demand for EVs. Despite car purchases growing over the past 12 to 18 months, sales have wobbled in the most recent quarter, with China total passenger vehicle sales down 13.4 percent.
With electric and hybrid cars making up an ever greater portion of overall sales, that could dent battery makers like CATL, which have spent billions of dollar expanding output to meet surging demand in the past.