Chinese traction battery manufacturer CATL was able to increase profits while revenue was falling

The most expensive part of any electric vehicle is the traction battery, and the largest manufacturer remains the Chinese company CATL. In the second quarter, it was able to increase net income by 17.71% sequentially to $1.7 billion, as well as by 13.43% year-on-year, although the manufacturer’s revenue decreased by 13.18% to $12 billion year-on-year.

Image source: CATL

To be fair, it should be noted that CATL’s revenue still grew by 9.06% sequentially, so we cannot talk about strictly negative revenue dynamics. The manufacturer’s profit margin for the second quarter remained at 26.64%, approximately comparable to the first quarter, but year-on-year it increased by 21.96%.

For the first half of the year as a whole, CATL received a net profit of $3.15 billion, which corresponds to an increase of 10.37% year-on-year. The company’s revenue in the first half of the year decreased by 11.88% to $23 billion. The production of traction batteries itself brought the company 67.5% of the total revenue for the period in the first half of the year; in annual comparison the decline reached 19.2%. The profit margin in this area of ​​activity was raised by 6.55 percentage points to 26.9% when compared with the same period last year.

In the segment of batteries for stationary energy storage systems, CATL’s revenue accounted for 17% of the total, and grew by 3% year-on-year in the first half of the year. The profit margin in this segment was raised by 7.55 percentage points to 28.87%. The rest of the revenue was generated by the production of materials for batteries and the recycling of used batteries; it grew by 13.02% year-on-year in the first half of the year. As of May of this year, CATL controlled 37.5% of the global traction battery market.