CATL is expected to announce a record profit in 2024, even with a decrease in revenue due to the decline in lithium prices.

      The exterior of CATL's headquarters located in Ningde, a city in eastern China. Credit: CATL

      On Tuesday, CATL announced that it anticipates its annual profit to surpass RMB 49 billion ($6.7 billion), marking a record achievement for the company. As the largest battery manufacturer in the world, CATL is focused on maintaining its leading position by diversifying its products and enhancing relationships with customers. Why this is significant: However, CATL cautioned that it might conclude the year with a revenue decrease for the first time since it began disclosing its financial results in 2015, due to the ongoing lithium price pressure that has been impacting the industry since its peak in late 2022. The Chinese battery giant is also exploring new business ventures and international markets to counteract slowing growth and intense competition. This shift has created a need for greater financial resources, and reports suggest the company is pursuing a share sale in Hong Kong with banks this year, according to Reuters.

      Details: CATL projects its revenue for 2024 to be between RMB 356 and 366 billion, indicating a decline of 8.71% to 11.2% compared to the previous year, following adjustments to prices in response to falling raw material costs. Last year's sales volume showed a slight increase, as noted in a securities filing. Nevertheless, the net profit for 2024 is expected to range from RMB 49 billion to 53 billion, reflecting a rise of 11% to 20% from the prior year. CATL attributed this profit growth to the introduction of new products and technologies, which also enhanced its relationships with clients.

      CATL is scheduled to release its full-year results on March 15. Context: Once a leading producer of nickel cobalt manganese (NCM) batteries for electric vehicles that offer higher energy density but come at a higher price, CATL faced competition from BYD in 2023, as more automakers began to shift towards more affordable iron-based batteries. BYD, China's top EV manufacturer and a notable battery supplier, gained dominance in the lithium iron phosphate (LFP) battery market in 2023, though CATL reclaimed its leading position last year, according to data from the China Automobile Battery Innovation Alliance.

      In August 2023, CATL launched the world’s first 4C superfast charging LFP battery, named Shenxing, followed by an LFP battery designed for heavy-duty trucks in September, and another tailored to meet rising hybrid EV demands a month later. The company plans to establish 1,000 battery swap stations across China next year and aims to provide clients with a skateboard chassis that integrates the battery within the vehicle's framework. Additionally, it supplies battery energy storage systems (BESS) for international projects in countries such as the United Arab Emirates and the United States.

      Jill Shen is a technology reporter based in Shanghai, specializing in Chinese mobility, autonomous vehicles, and electric cars. You can connect with her via email at [email protected] or on Twitter @jill_shen_sh.