BEIJING, March 14 (Reuters) - CATL reported its slowest pace of growth in net profit in six years, with a 15% increase in 2024, reaching 50.7 billion yuan ($7.01 billion). This growth fell short of the company's forecasted 11.1%-20.1% increase due to a prolonged price war in China's electric vehicle market placing pressure on the Chinese EV battery giant.
The company's revenue declined by 9.7% to 362 billion yuan, marking its first annual revenue decrease since CATL began reporting its operational figures in 2015. Despite an increase in sales volume, CATL experienced a decrease in operating income due to adjusted product prices offsetting declining raw material costs like lithium carbonate, as stated by the company in January.
In the fourth quarter, net profit rose 13.6% year-on-year to 14.7 billion yuan, a slowdown compared to 26% growth in the previous quarter. Quarter-on-quarter revenue contraction also lessened to 3.1% to 103 billion yuan, following a 12.5% decline in the third quarter, making it the fifth consecutive quarterly revenue decrease.
The competitive pricing environment in China led to CATL lowering battery prices to protect its market share, while benefiting from reduced battery material costs. The company observed a 17.6% drop in the cost of power battery business, exceeding the 11.3% decrease in revenue from this major revenue source.
CATL strengthened its global market position by increasing its share from 36% to 38% in 2024 for batteries utilized in both EVs and energy storage systems. According to SNE Research, BYD maintained second place with a 15% share, while LGES saw its share decrease from 13% to 10%.
The company experienced accelerated growth in battery deliveries for energy storage systems, accounting for 22.4% of its total battery shipments in 2024, up from 19.4% in 2023 based on data from SNE Research.
Beyond focusing on batteries, CATL revealed a new EV chassis in December and is contemplating a shift towards power grids. Its international investments include a 7.3 billion euro battery plant in Hungary aimed at supplying companies like Mercedes-Benz and BMW, as well as a newly established battery plant with Stellantis in Spain.
To finance its Hungarian plant, CATL submitted an application in Hong Kong last month to secure funds, anticipating to raise at least $5 billion from the deal.
($1 = 7.2324 Chinese yuan renminbi)