CATL Accelerates Global Expansion Despite Poor Performance Amid Raw Material Price Surge

[Asia Economy Reporter Oh Hyung-gil] Even the world's largest electric vehicle battery manufacturer could not escape the burden of rising key raw material prices. Securing raw material supply chains is becoming as important as the competition among battery companies to expand production facilities worldwide.

Looking at CATL's first-quarter earnings announced at the end of last month, CATL recorded a net profit of 1.49 billion yuan (approximately 283 billion KRW) in the first quarter. This is about a 24% decrease compared to the first quarter of last year.

Although revenue increased by a staggering 153% to 48.67 billion yuan (approximately 9.25 trillion KRW), the decline in net profit overshadowed the growth.

CATL explained that the rise in raw material prices led to increased production costs, which affected its performance. During this period, operating expenses surged by 198.66% to 41.628 billion yuan, rising more steeply than revenue.

Prices of key raw materials such as lithium, nickel, and cobalt have been on an upward trend since the end of last year, increasing the cost burden for battery companies.

Although China holds a major position in the raw material market, it was not immune to the impact of price hikes, which carries significant implications for our battery companies as well.

CATL has been striving to expand its business scope globally, moving beyond China, which has been a major pillar of its operations. This is interpreted as an effort to boost sales and profitability by supplying batteries to global automakers.

CATL is reportedly in the final stages of site selection for its first electric vehicle battery factory in the United States through negotiations to establish new battery plants for electric vehicles to supply BMW and Ford in the U.S.

CATL plans to open its first overseas factory in Arnstadt, Germany, which has an investment of 1.8 billion euros (approximately 2.4079 trillion KRW), with customers including BMW, Tesla, and Volkswagen, in the second half of the year.

Meanwhile, according to SNE Research, in the first quarter of this year, China’s CATL maintained its top position with a 33.3% share of the global electric vehicle battery usage. LG Energy Solution ranked second with a 15.1% share, SK On was fifth (6.3%), and Samsung SDI was seventh (3.6%).

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