Batterymaker CATL tumbles on earnings miss, competition fears
China’s battery champion is reckoning with intensifying domestic competition amid the country’s EV price wars. CATL shares plunged after the company reported slower-than-expected profit growth, as China’s battery champion reckoned with intensifying domestic competition and EV price wars. Its stock has nearly halved since May, as investors fret over expiring tax carve-outs and a trend dubbed “ de-CATLization,” whereby former customers like Xiaomi and Li Auto source batteries from cheaper alternatives and plan to develop them in-house. Beyond domestic challenges, CATL is also scrambling to build more plants in Europe to avoid running afoul of increasing EU protectionism. The “China decoupling story” is “only accelerating,” a UBS analyst said: “Full China battery and electrical equipment supply chain dependence is no more palatable than full Saudi Arabia or Middle East oil dependence was… 30 years ago.”
China’s battery champion is reckoning with intensifying domestic competition amid the country’s EV price wars. CATL shares plunged after the company reported slower-than-expected profit growth, as China’s battery champion reckoned with intensifying domestic competition and EV price wars. Its stock has nearly halved since May, as investors fret over expiring tax carve-outs and a trend dubbed “ de-CATLization,” whereby former customers like Xiaomi and Li Auto source batteries from cheaper alternatives and plan to develop them in-house. Beyond domestic challenges, CATL is also scrambling to build more plants in Europe to avoid running afoul of increasing EU protectionism.
The “China decoupling story” is “only accelerating,” a UBS analyst said: “Full China battery and electrical equipment supply chain dependence is no more palatable than full Saudi Arabia or Middle East oil dependence was… 30 years ago.”