Chinese battery manufacturer and Tesla supplier CATL, has reported its earnings for 2022. The company witnessed a significant increase in its overall income from the previous year, supported largely by its domination in supplying EV makers with cells.
According to Bloomberg data, CATL reported a net income growth of 92.9 percent from the previous year, amounting to 30.72 billion yuan or $4,412,841,984. The income was in line with the company’s preliminary guidance of between 29.1 billion and 31.5 billion yuan, exceeding analysts’ expectations of 28.8 billion yuan. The company’s revenue also saw a substantial increase of 152 percent, amounting to 328.6 billion yuan or $47,201,779,860. The 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 its partnerships with companies like Ford. As of 2022, the company claimed to control more than one-third of the global battery market share, i.e., 37 percent, and dominated its competitors like LG Energy, BYD, and Panasonic in terms of total GWh installations last year. CATL installed 191.6 GWh of battery capacity in 2022, while LG Energy and BYD, the second and third-place companies in terms of total market share, installed only 70.4 GWh.
Despite its strong earnings and global domination in terms of battery market share, CATL still has challenges to face 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. Furthermore, 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.
Tesla, CATL’s primary customer, faced production cuts in December due to routine maintenance. However, the automaker resumed full production in January, reporting the sale of 66,041 units in the first month of the year after cutting prices on vehicles built in Shanghai. Interestingly, CATL’s output has not fully recovered as of yet, despite Tesla’s recovery.
Nevertheless, CATL’s control of such a large slice of the battery market positions it to perform well in the market, even with slowing demand for its batteries. The company is continuing to expand into other markets, including Hungary.