Amid South Korea's Battery Slump... China's CATL Posts 800 Billion KRW Net Profit Last Year

[Image source=Yonhap News]

[Asia Economy Reporter Park Soyeon] The global No.1 battery company, China's CATL, is estimated to have seen its net profit surge by up to 45% compared to the previous year.

While the three major domestic battery companies each recorded losses ranging from 300 billion to 500 billion KRW in their electric vehicle battery businesses last year, the rapid progress of Chinese battery companies stands out.

According to the industry on the 4th, CATL recently announced preliminary earnings, presenting an estimated net profit for last year of 4.06 billion to 4.91 billion yuan (686.4 billion to 829.4 billion KRW), an increase of 20 to 45% compared to the previous year.

CATL cited factors such as increased battery demand due to the expansion of the electric vehicle market, expansion of its production capacity, and reduction of production costs as reasons for the net profit increase.

On the other hand, the three domestic battery companies all recorded losses last year.

LG Chem posted an operating loss of 454.3 billion KRW in its battery business, SK Innovation's battery business showed slight improvement but still had an operating loss of 309.1 billion KRW. Samsung SDI is also estimated to have recorded losses of up to 500 billion KRW in its medium and large battery business.

An industry official explained, "While the top domestic companies are embroiled in legal disputes, CATL is rapidly growing by leveraging the government's focused support for the battery business."

However, CATL has faced a major setback this year: the rapidly spreading novel coronavirus infection.

The company has suspended operations at all its factories in Fujian Province, Qinghai Province, and Jiangsu Province, and plans to resume on the 10th. Notably, about 60% of CATL's production volume is supplied to the domestic market, making the impact unavoidable.

An industry official forecasted, "Since Chinese automakers' factories are also currently suspended, meeting delivery deadlines should not be difficult," adding, "It is unlikely to have a significant impact on the company's growth."

Among domestic battery companies, LG Chem and SK Innovation have halted operations at their Chinese battery factories, while Samsung SDI is operating its factories normally. For now, the damage is limited to the suspension of Chinese factory operations, but if the novel coronavirus situation prolongs, supply issues in China may arise.

This content was produced with the assistance of AI translation services.