Chinese electric vehicle (EV) battery maker CATL predicts its net profits will nearly triple in the third quarter as EV production surges worldwide.
CATL expects third-quarter net profits to hit between $1.23 billion and $1.38 billion, rising from $460 million the same time last year, the firm said in a stock exchange filing on Monday.
“Production and sales significantly increased, which helped to secure its persistently leading position in the global market and result in the rapid profit growth,” CATL said in the note.
The company is now the world’s biggest battery maker and accounts for more than a third of global EV battery sales.
CATL has accelerated its expansion into overseas markets with contracts to supply batteries to major carmakers including Mercedes Benz Group and BMW in Europe, plus 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, Europe’s largest so far.
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.
CATL’s shares rose by almost 6% on Tuesday following its strong outlook, although the company’s shares have lost more than 30% so far this year, roughly in line with the slump in Chinese markets this year.
- Reuters, with additional editing from Alfie Habershon
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