Chinese battery manufacturer CATL reported a 32.9% increase in net profit for the first quarter of 2025, reaching 14 billion yuan (US$1.92 billion), according to a stock market filing.

This represents the company’s fastest profit growth in nearly two years. Revenue rose 6.2% to 84.7 billion yuan (US$11.59 billion), ending five consecutive quarters of decline.

The company is preparing for a listing on the Hong Kong Stock Exchange, aiming to raise at least US$5 billion.

The China Securities Regulatory Commission approved the share sale in late March. The listing is expected to occur in the second quarter of 2025.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ CATL’s market dominance reflects broader EV battery industry consolidation

CATL’s 32.9% profit growth aligns with its commanding 38.2% global market share in EV battery installations during January-February 2025, when it supplied 49.6 GWh of batteries worldwide 1.

This dominance exists in a rapidly expanding market, with total global EV battery usage reaching 129.9 GWh in early 2025, a 40.3% year-over-year increase 1.

CATL remains the only supplier with over 30% global market share, more than double its nearest competitor BYD at 16.9%, demonstrating how the industry is consolidating around a few major players 2.

The company’s financial performance reflects a broader industry trend where economies of scale have become crucial for competitiveness, with battery pack prices dropping below $100 per kWh, a key threshold for EV price parity with conventional vehicles 3.

CATL’s revenue turnaround after five declining quarters suggests it has successfully navigated the challenging transition from rapid growth to sustainable profitability in a maturing market.

2️⃣ Strategic diversification beyond manufacturing drives future growth

CATL’s recent negotiations to acquire a controlling stake in NIO’s power unit represents a strategic pivot beyond traditional manufacturing toward higher-margin services and infrastructure 4.

The company has already committed up to RMB 2.5 billion to invest in NIO Power’s battery swapping network, which currently operates over 3,000 battery swapping stations throughout China 5.

This move aligns with the growth in Battery-as-a-Service (BaaS) models, which are creating significant new revenue streams as the global EV battery market is projected to expand from $91.93 billion in 2024 to $251.33 billion by 2035 6.