China’s Contemporary Amperex Technology (CATL) reported stronger-than-expected earnings for 2021 on the back of increased demand for cleaner cars, further solidifying the company’s position as the world’s largest maker of batteries for electric vehicles (EVs). The net income for the year ended December 31 was 30.72 billion yuan ($4.4 billion), an increase of 92.9% from the previous year and beating the median analyst estimate of 28.8 billion yuan. The revenue was 328.6 billion yuan, up 152% and in line with analysts’ forecasts.
CATL’s core power battery business accounted for most of the company’s sales and generated margins of 17.2%, matching market estimates. The firm has a 37% share of the global market for EV batteries in 2022, driven by the popularity of its lithium-iron-phosphate (LFP) batteries, which are cheaper to produce. South Korea’s LG Energy Solution and China’s BYD Co. share the second spot with 13.6% each, according to SNE Research data.
The Chinese company’s dominance has caught the attention of Chinese President Xi Jinping, who recently offered rare remarks on the topic during the annual parliamentary meetings in Beijing. He said that he views the company’s leading position with “joy and worry.” CATL recently signed a deal with Ford Motor Co. to build a battery plant in the United States, highlighting the company’s growing global reach.
However, the news of CATL’s strong earnings came amid a broader EV rout sparked by a round of steep price cuts, which raised concerns about overcapacity. As a result, CATL’s shares fell by 0.2% on Friday. Despite the recent dip, the company’s robust performance underscores the growing demand for EV batteries as more countries aim to reduce carbon emissions and shift to renewable energy sources.