CATL Forecasts Moderate 2023 Growth Amidst Evolving EV Landscape
CATL, the prominent Chinese electric vehicle (EV) battery giant, anticipates a net profit growth of up to 48.1% in 2023. This forecast, revealed on Tuesday, reflects a significant deceleration compared to the previous year, attributed to challenges arising from intensified competition and a slowdown in EV demand in China – the world’s largest EV market.
Market Dynamics and Challenges
As the largest EV battery manufacturer globally, CATL faces increased competition from smaller rivals and contends with a shrinking market in China. The company predicts a 38.3-48.1% net profit growth in 2023, ranging from 42.5 billion yuan to 45.5 billion yuan ($5.92-6.34 billion), in contrast to the remarkable 92.89% gain experienced in 2022.
In a similar vein, China’s second-ranking EV battery manufacturer, BYD (002594.SZ), which surpassed Tesla (TSLA.O) as the leading EV seller in terms of sales, forecasts a more modest net profit increase of up to 86.5% in 2023. This pace of growth is considerably slower compared to the remarkable 446% surge witnessed in 2022.
CATL’s dominance in its home market has seen a decline, constituting 43.11% of battery installations in China-made EVs in 2023, down from 48.2% in the previous year, as per data from the China Automotive Battery Innovation Alliance (CABIA). In contrast, BYD and the third-ranking CALB (3931.HK) witnessed a combined market share increase to 35.7% in 2023 from the preceding year’s 29.98%, as indicated by the same data.
Beyond the borders of China, CATL’s partner Ford Motor (F.N) is facing scrutiny from U.S. lawmakers regarding its planned Michigan battery plant. The plant’s utilization of technology supplied by CATL has drawn criticism, signaling challenges extending beyond the Chinese market.
This shift in market dynamics highlights the evolving landscape for EV battery manufacturers, with intensified competition and changing market shares shaping the industry’s trajectory.
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