EV Battery Giant CATL Doubled its Profits in Q2 Earnings

Chinese EV battery giant CATL continues to pull ahead of the rest of the industry, according to its Q2 reports, which showed CATL’s gross revenue rising a massive 158% vs. Q2 last year, reaching 64.29 billion yuan (well over $9 billion).

The company maintains a huge market lead in the EV battery space, with 34.8% of the total market share in the first half of 2022 (up from 28.6% last year) and ahead of South Korean tech firm LG Energy (which produces the batteries for GM and the Chevy Bolt), which saw a 73% “plunge” in second quarter profits, likely driven by the $1.9 billion cleanup bill from the mess that was made at GM.

CATL’s growth is expected to continue – though, maybe, not at that speed – as Reuters reports that EV sales in China are up 120% in the first half of 2022, according to the China Association of Automobile Manufacturers.

That said, it’s not all sunshine and buttercups for the Chinese battery maker. The prices on rare-earth metals remain high, with lithium prices leading the charge (ha!), having gone up 343% in the past year, en route to what may be record highs in the coming months. Despite the added costs, though, CATL’s net profits were actually up this year outpacing the revenue growth at 164% (vs. 158%), reaching nearly $975 million in its Q2 and doing a nice job of proving that corporate profits, and not government stimulus checks, are what’s really driving inflation.

That figure, by the way, comes from an undisclosed Reuters calculation. From the source article, “CATL, whose clients include Tesla (TSLA.O), Volkswagen and BMW (BMWG.DE), booked a net profit of 6.68 billion yuan ($974.61 million) from April to June, according to Reuters calculations based on the company’s filings, up 164% from a year ago.” So – do with that what you will.

As for long term prospects, electric cars continue to gain market share just about everywhere – setting records and reaching tipping points all along the way, with the incentive for Canadian and US-sourced lithium production only growing.

That’s my take, anyway – and, while it’s not financial advice (this is a Wendy’s Drive-thru), it’s still something. That said, we’d love to hear your take, so head on down to the comments and let us know what you think of CATL’s performance, and whether you think anyone will snatch the market lead from them anytime soon.

Source: Reuters, featured image via CATL.