Shares in CATL, the world’s largest battery maker, fell nearly 4% on Wednesday after the Chinese company warned that its annual revenue fell for the first time last year and profit growth slowed. According to a securities filing, CATL’s revenue declined by 8.7% to 11.2% due to a decrease in raw material prices, resulting in a decline in operating income despite growing sales volumes. The company’s net profit rose by 11.1% to 20.1%, the slowest profit growth since 2019. CATL’s shares dropped 3.8% in the morning session, its largest intraday decline since October.
The company’s decision to adjust product prices to reflect the decline in raw material costs, such as lithium carbonate, led to the revenue decline. CATL intervened in the lithium market in 2022 by opening a massive lithium hub in Jiangxi Province, but since then, lithium prices have fallen by nearly 86%. The company’s founder, Robin Zeng, told Reuters in November that they would stop production at the mine as they had achieved their goal.
CATL is diversifying beyond batteries, launching a new electric vehicle chassis in December and exploring a pivot to power grids. The company is also working on investments abroad, including a 100 GWh battery factory in Hungary and a new jointly owned battery plant with Stellantis in Spain. CATL has a 45.1% market share of batteries in Chinese-made electric vehicles, up 1.9 percentage points from the previous month.