Tesla supplier CATL sees massive income increase supported by EV market domination

Chinese battery maker and Tesla supplier CATL reported its earnings for 2022 today and showed a massive increase in overall income from the year prior, and it was supported largely by its domination in supplying EV makers with cells.

CATL reported a net income growth of 92.9 percent from the year prior, seeing 30.72 billion yuan or $4,412,841,984. Analysts expected just 28.8 billion yuan of income, according to Bloomberg data. The income was in line with the company’s preliminary guidance of between 29.1 billion and 31.5 billion yuan.

Revenue also saw a sizeable increase of 152 percent, reporting 328.6 billion yuan, or $47,201,779,860. Revenue increases were led by the company’s core power battery business, which generated margins of 17.2 percent.

CATL has been one of Tesla’s leading suppliers for several years and has expanded into other partnerships with companies like Ford. As of 2022, CATL said it controlled more than one-third of the total battery market globally, 37 percent, to be precise.

It also commanded total GWh installations last year, dominating competitors like LG Energy, BYD, and Panasonic, who only delivered a fraction of the total installations that CATL did in 2022.

CATL installed 191.6 GWh of battery capacity last year, while LG Energy and BYD, the second and third-place companies in terms of total market share, both installed 70.4 GWh.

Despite its strong earnings and global domination in terms of battery market share, CATL still has rough waters to navigate in its home country. In China, EV sales growth stagnated slightly in Q4 due to COVID-19 shutdowns and a new wave of infections that occurred.

Tesla then cut output at Gigafactory Shanghai in late December, but the reasoning for the stoppage was unclear until the automaker stated that it was scheduling routine maintenance on production lines during this time.

“The Shanghai plant will still maintain efficient production and excellent output in 2022. Vehicle production will be carried out as planned for the annual production line maintenance,” Tesla China said in a statement. “At the same time, after a year of hard work, the workers also took a break during the maintenance period of the production line. The charging piles and other workshops have not stopped, and the media’s statement that the factory has stopped production is not entirely accurate.”

Tesla did report a sizeable dip in December of 44 percent compared to November. It then recovered in January after the automaker cut prices on vehicles built in Shanghai, reporting 66,041 units were sold during the first month of the year.

Interestingly, CATL’s output has not seemed to not fully recover as of yet, and Reuters reported last month that the battery maker began offering discounts to clients in an attempt to win more orders and expand sales and output.

CATL is positioned to perform well in the market regardless of some slowing demand for its batteries simply due to its control of such a large slice of the battery market. It is continuing to expand into other markets as well, including Hungary.

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