Contemporary Amperex Technology Co. Ltd. (CATL) (SHE: 300750) is the world’s largest EV battery maker who Elon Musk recently met with amid concerns about ties between the Company and Tesla may fray as the US-China conflict escalates.
No details were given of Musk’s discussion with the Chinese battery magnate, but the meeting underscored the importance of the world’s largest electric vehicle (EV) battery-maker — and key Tesla supplier — to the burgeoning global industry.
Shares of Contemporary Amperex Technology Co. Ltd. (CATL), the world’s top maker of electric vehicle batteries, plunged in Shenzhen on speculation that new American rules on EV subsidies undermined its relationship with top client Tesla Inc.
The stock took a nosedive Monday after trading started. It closed down 3.8% at 219.8 yuan ($31) a share, paring back a drop of more than 5% in the morning.
When we think about high value add, technically complicated things, we think about iPhones or other tech. Not exactly batteries. But as it turns out, batteries are surprisingly complicated to make. In this video, we are going to look at how CATL manufactures one of their EV batteries.
Their market share in China is 50%, accounting for 28% globally. They have become a critical supplier to the country's fast-rising EV industry and recently signed Tesla as a big customer. Just ten years old, the company is today already one of China's most valuable companies. In this video, we will take a closer look at this mysterious, low-profile Titan.
Analysts at Chinese firms, including Tianfeng Securities, Changjiang Securities, and Haitong International Securities, predict the supplier will report good business performance this year whereas New York-based Morgan Stanley recently downgraded its forecast due to an expected narrowing market share of new energy vehicle batteries.
CATL reported sales for the first quarter to be CNY89 billion (US$12.95 billion), up 82.91% year-on-year and beating Bloomberg's estimated CNY75 billion by 18.45%, with net income rising by 557.98% to CNY9.8 billion, more than the combined profit of the first half of 2022. CATL's gross margin and profit margin for the first quarter was 21.27% and 11.32%, respectively.
Bloomberg analysts Steve Man and Joanna Chen said in a research note ahead of the earnings release that higher battery sales and falling lithium costs likely bolstered CATL's profit surge in the first quarter, especially when the battery demand remains resilient, and earlier prices cuts by Tesla boosted EV sales and demands for CATL's batteries. Bloomberg Intelligence analysts forecasted CATL's battery sales volume might rise 40-50% in 2023.
Contemporary Amperex Technology Co. Ltd., or CATL, reported an 83% jump in revenue, beating market expectations and fueled by climbing demand for cleaner vehicle and falling raw material costs.
Southeast Asia's largest economy is eager to utilize its abundant supply of nickel, an essential component in EV batteries, to develop its own battery and EV industries.
He did not provide details of the planned fund, such as size and launch timing. But INA and CATL had earlier said they would establish a "green fund" with CMB International Capital Corp., a subsidiary of China Merchants Bank (HKG: 3968 / SHA: 600036 / OTCMKTS: CIHKY / OTCMKTS: CIHHF). INA said then that it believed the fund could reach $2 billion.
Tesla vehicles powered by batteries from China’s CATL, the world’s No. 1 battery maker, have recently been added to the list of U.S. subsidized vehicles, allowing CATL to indirectly benefit from the U.S. Inflation Reduction Act (IRA).
Some industry observers called into a question how CATL’s battery vehicles qualified for the subsidy program. According to IRA guidelines, in order to receive a US$3,750 subsidy each for a total of US$7,500, EVs must meet the following conditions: at least 50 percent of their battery parts are produced and assembled in North America, and at least 40 percent of their batteries’ key minerals were extracted or processed in North America or countries that have signed free trade agreements (FTAs) with the United States.
Industry analysts believe that Tesla bypassed the IRA by purchasing key minerals directly and supplying them to CATL.
Industry insiders say SK On[SK Innovation (KRX: 096770)] and LG Energy Solution (KRX: 373220), key Korean partners for Ford, are likely to lose price competitiveness to the Chinese rival. The two companies mostly produce NCM batteries composed of lithium, nickel, cobalt and manganese, which cost more than LFP batteries.
“NCM batteries are almost twice as expensive than LFP batteries. CATL’s price advantage is likely to appeal to broader consumer base seeking to buy low-cost and affordable EVs,” said an industry source on condition of anonymity.
Disclaimer. The information and views contained on this website and newsletter is provided for informational purposes only and does not constitute investment advice and/or a recommendation. Your use of any content is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the content. Seek a duly licensed professional for any investment advice. I may have positions in the investments covered. This is not a recommendation to buy or sell any investment mentioned.
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CATL (SHE: 300750): World's Largest EV Battery Maker Who Elon Musk Recently Met With
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Contemporary Amperex Technology Co. Ltd. (CATL) (SHE: 300750) is the world’s largest EV battery maker who Elon Musk recently met with amid concerns about ties between the Company and Tesla may fray as the US-China conflict escalates.
In Depth: U.S. Tensions Could Sap Chinese EV-Battery Makers’ Global Ambitions (Caixin) $ (June 6, 2023)
Tesla May Partner With CATL to Build Battery Plant (Youtube) 2:07 Minutes (Bloomberg TV) March 2023
However, it was also just reported:
CATL Shares Nosedive Amid Speculation on Weakened Tesla Tie (Caixin) $ (June 6, 2023)
OVERVIEW:
Contemporary Amperex Technology Co. Ltd. manufactures and sells electric vehicle and energy storage battery systems worldwide. The company's products are used in road passenger transport and heavy-duty transport application; light trucks, minibuses, and minivans for express, supermarket, and fresh food deliveries; electric washing vehicles, electric washing and sweeping vehicles, electric garbage trucks, and other vehicles; forklifts and slag trucks; two-wheeled vehicles for commuting, food delivery, express delivery, etc.; vessel electrification; and special vehicle solutions. The Company also provides battery recycling services. Also see: EV Battery Maker Market Share Chart & Stock List (China, Japan & South Korea Stocks)
How China's CATL Makes an EV Battery (Youtube) 15:11 Minutes (Asianometry) December 2021
When we think about high value add, technically complicated things, we think about iPhones or other tech. Not exactly batteries. But as it turns out, batteries are surprisingly complicated to make. In this video, we are going to look at how CATL manufactures one of their EV batteries.
China's CATL Group is Winning the EV Battery Industry (For Now) (Youtube) 20:07 Minutes (Asianometry) June 2021
Their market share in China is 50%, accounting for 28% globally. They have become a critical supplier to the country's fast-rising EV industry and recently signed Tesla as a big customer. Just ten years old, the company is today already one of China's most valuable companies. In this video, we will take a closer look at this mysterious, low-profile Titan.
RECENT FINANCIALS / NEWS:
Note: The investor relations site is only in Chinese.
CATL Stops Sliding as Chinese Brokerages Counter Tesla Supplier's US Downgrade (Yicai Global) June 2023
Analysts at Chinese firms, including Tianfeng Securities, Changjiang Securities, and Haitong International Securities, predict the supplier will report good business performance this year whereas New York-based Morgan Stanley recently downgraded its forecast due to an expected narrowing market share of new energy vehicle batteries.
CATL posted over 550% rise in profit in 1Q23 (DigiTmes Asia) April 2023
CATL reported sales for the first quarter to be CNY89 billion (US$12.95 billion), up 82.91% year-on-year and beating Bloomberg's estimated CNY75 billion by 18.45%, with net income rising by 557.98% to CNY9.8 billion, more than the combined profit of the first half of 2022. CATL's gross margin and profit margin for the first quarter was 21.27% and 11.32%, respectively.
Bloomberg analysts Steve Man and Joanna Chen said in a research note ahead of the earnings release that higher battery sales and falling lithium costs likely bolstered CATL's profit surge in the first quarter, especially when the battery demand remains resilient, and earlier prices cuts by Tesla boosted EV sales and demands for CATL's batteries. Bloomberg Intelligence analysts forecasted CATL's battery sales volume might rise 40-50% in 2023.
CATL First Quarter Revenue Surges 83% (Youtube) 1 Minute (Bloomberg TV) April 2023
Contemporary Amperex Technology Co. Ltd., or CATL, reported an 83% jump in revenue, beating market expectations and fueled by climbing demand for cleaner vehicle and falling raw material costs.
CATL unveils LATEST Condensed Battery with 1000 mile EV range + Aircrafts (Youtube) 9:23 Minutes (Exploratics) April 2023
Indonesia sovereign fund steps up EV plans with China's CATL (Nikkei Asia) April 2023
Southeast Asia's largest economy is eager to utilize its abundant supply of nickel, an essential component in EV batteries, to develop its own battery and EV industries.
He did not provide details of the planned fund, such as size and launch timing. But INA and CATL had earlier said they would establish a "green fund" with CMB International Capital Corp., a subsidiary of China Merchants Bank (HKG: 3968 / SHA: 600036 / OTCMKTS: CIHKY / OTCMKTS: CIHHF). INA said then that it believed the fund could reach $2 billion.
Ford announces new U.S. factory for batteries, licenses tech from China's CATL (Youtube) 5:53 Minutes (CNBC) Feb 2023
China's CATL to Indirectly Benefit from IRA, Putting Korean Battery Makers on Alert (BusinessKorea) May 2023
Tesla vehicles powered by batteries from China’s CATL, the world’s No. 1 battery maker, have recently been added to the list of U.S. subsidized vehicles, allowing CATL to indirectly benefit from the U.S. Inflation Reduction Act (IRA).
Some industry observers called into a question how CATL’s battery vehicles qualified for the subsidy program. According to IRA guidelines, in order to receive a US$3,750 subsidy each for a total of US$7,500, EVs must meet the following conditions: at least 50 percent of their battery parts are produced and assembled in North America, and at least 40 percent of their batteries’ key minerals were extracted or processed in North America or countries that have signed free trade agreements (FTAs) with the United States.
Industry analysts believe that Tesla bypassed the IRA by purchasing key minerals directly and supplying them to CATL.
Ford-CATL partnership could erode Korean batteries’ price competitiveness (The Korea Herald) February 2023
Industry insiders say SK On [SK Innovation (KRX: 096770)] and LG Energy Solution (KRX: 373220), key Korean partners for Ford, are likely to lose price competitiveness to the Chinese rival. The two companies mostly produce NCM batteries composed of lithium, nickel, cobalt and manganese, which cost more than LFP batteries.
“NCM batteries are almost twice as expensive than LFP batteries. CATL’s price advantage is likely to appeal to broader consumer base seeking to buy low-cost and affordable EVs,” said an industry source on condition of anonymity.
KEY RATIOS:
P/E (Google Finance): 23.23 / Forward P/E (Yahoo! Finance): 25.64
Dividend Yield (Google Finance): 0.85% / Forward Dividend & Yield (Yahoo! Finance): 1.31%
1 YEAR CHART:
LONG TERM CHART:
ADDITIONAL RESOURCES:
Website
Investor Relations (In Chinese Only)
Wikipedia
CATL Stops Sliding as Chinese Brokerages Counter Tesla Supplier's US Downgrade (Yicai Global) June 2023
In Depth: U.S. Tensions Could Sap Chinese EV-Battery Makers’ Global Ambitions (Caixin) $ (June 6, 2023)
CATL Shares Nosedive Amid Speculation on Weakened Tesla Tie (Caixin) $ (June 6, 2023)
EV Battery Maker Market Share Chart & Stock List (China, Japan & South Korea Stocks) May 2023
China's CATL to Indirectly Benefit from IRA, Putting Korean Battery Makers on Alert (BusinessKorea) May 2023
CATL posted over 550% rise in profit in 1Q23 (DigiTmes Asia) April 2023
CATL First Quarter Revenue Surges 83% (Youtube) 1 Minute (Bloomberg TV) April 2023
CATL unveils LATEST Condensed Battery with 1000 mile EV range + Aircrafts (Youtube) 9:23 Minutes (Exploratics) April 2023
Tesla May Partner With CATL to Build Battery Plant (Youtube) 2:07 Minutes (Bloomberg TV) March 2023
Ford announces new U.S. factory for batteries, licenses tech from China's CATL (Youtube) 5:53 Minutes (CNBC) Feb 2023
Ford-CATL partnership could erode Korean batteries’ price competitiveness (The Korea Herald) February 2023
How China's CATL Makes an EV Battery (Youtube) 15:11 Minutes (Asianometry) December 2021
China's CATL Group is Winning the EV Battery Industry (For Now) (Youtube) 20:07 Minutes (Asianometry) June 2021
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Disclaimer. The information and views contained on this website and newsletter is provided for informational purposes only and does not constitute investment advice and/or a recommendation. Your use of any content is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the content. Seek a duly licensed professional for any investment advice. I may have positions in the investments covered. This is not a recommendation to buy or sell any investment mentioned.