China EV Battery Giant CATL Sees Profits Nearly Triple

China’s CATL saw profits nearly triple in the third quarter from the same time last year, the world’s largest electric vehicle (EV) battery maker said on Friday.

CATL reported profits of $1.3 billion in the three months to end-September, a company filing to the to the Shenzhen stock exchange said. Revenue also rose 232.5% to $13.41 billion.

CATL Overseas Expansion

CATL has accelerated its expansion into overseas markets with contracts to supply batteries to major carmakers including Mercedes Benz Group and BMW in Europe and Ford Motor Co in the United States, where government incentives are driving demand for EVs.

The Chinese firm announced in August that it would build a $7.6 billion battery plant in Hungary, which would be Europe’s largest.

But it’s to halt investment plans in battery plants in North America due to concerns that new US rules on sourcing battery materials will drive costs higher.

To offset rising costs of battery materials, CATL has taken measures including signing long-term contracts with suppliers, recycling materials and negotiating a dynamic battery pricing scheme with automakers.

Bright Future Ahead

CATL, which supplies one of every three EV batteries sold globally to clients is expected to double deliveries this year amounting to 300 gigawatt hours (GWh), according to analysts at Soochow Securities.

Its profitability is also likely to improve thanks to its investments in battery metals and an expected increase in lithium output next year, they added.