CATL experiences a 34% surge in profits, bucking worldwide electric vehicle demand and geopolitical turmoil trends
In the midst of a fierce domestic price war in mainland China, the world's largest EV market, and a weak global demand for electric vehicles (EVs), Contemporary Amperex Technology Co Ltd (CATL) has managed to increase its net profit by approximately 33-34% in the second quarter of 2025.
The company's power battery revenue grew by 16.8% year-on-year, accounting for over 70% of total revenue. CATL maintained its position as the world’s largest battery supplier by installed capacity, with a 38.1% global market share, supporting sales even amid weak demand.
While gross profit margin in the core power battery segment fell (from 23.48% to 22.41%), margins in its battery materials and recycling segment more than tripled to 26.42%, improving overall gross margin by 1.57 percentage points and bolstering profitability.
CATL improved operating cash flow by over 31%, helping sustain profitability despite pricing pressures. The company also raised significant capital through a blockbuster Hong Kong share sale, which has strengthened its financial position and funded global expansion plans.
Furthermore, CATL operates mines, such as the Yichun mines, feeding its material needs and is seeking to extend mining licenses. This integrated supply chain and cost advantage supports the company's diversified business and resource management.
Amperex Technology, a rival EV battery maker, also reported a 34% increase in net profit year-on-year to 16.5 billion yuan (US$2.3 billion) in the second quarter. However, the company's previous quarter's revenue growth was only 6.2%.
It's important to note that the global demand for EVs remains weak, with economic and geopolitical uncertainties making consumers hesitant to make significant purchases. Battery prices are also declining, which puts pressure on companies like CATL to maintain profitability.
On Wednesday, Amperex Technology filed a report with the Hong Kong stock exchange detailing its financial performance. The overall gross profit margin for the company rose by 1.57 percentage points, partly due to the increase in the battery materials and recycling business gross margin.
In summary, CATL’s net profit growth can be attributed to the company's ability to increase revenue volumes, diversify into higher-margin battery materials and recycling, improve operational efficiency, and leverage capital raised through equity sales to support expansion and maintain market leadership.
Technology played a significant role in CATL's increased net profit, as the company's gross margin in the battery materials and recycling segment more than tripled, contributing to an overall improvement in gross margin. Additionally, the financial position of CATL was bolstered by raising significant capital through a share sale, allowing for global expansion and further business growth in the technology sector.
