SHANGHAI — Chinese battery giant CATL posted sharply slower growth in fourth quarter net profit, after COVID-19 outbreaks and consumer caution hit electric-vehicle demand in the world’s largest auto market.
The world’s largest battery maker’s profit during October to December increased 61 percent from the same period in 2021, according to Reuters calculations based on a company filing. That compares to 131 percent and 164 percent growth in the third and second quarters, respectively.
EV sales growth in China largely slowed in the fourth quarter as the economy was heavily disrupted by efforts to curb the spread of COVID-19 and then the sudden end to the country’s virus prevention policies, which unleashed a massive wave of infections across the country.
Tesla, CATL’s largest customer by volume, cut output in at a Shanghai assembly plant by more than a third in December from November, China Passenger Car Association data showed, as the U.S. automaker grappled with rising inventory.
The trend has extended to the first quarter even though Tesla and its Chinese rivals have started slashing prices of their best-selling models to boost sales in what analysts have described as a price war.
CATL offered discounts to some Chinese automakers, Reuters reported last month, reflecting a downturn in the price of lithium and a bid to win more orders.
CATL recorded full year profit of 30.7 billion yuan ($4.41 billion), according to the company’s filing to the Shenzhen Stock Exchange, largely in line with its estimates in January.
The gross profit margin of its battery products to power electric vehicles, which contributed the majority of CATL’s revenue, stood at 17.2 percent in 2022, down 4.8 percent from a year ago, according to the filing.