China’s top two battery makers CATL and BYD both posted lowly figures for the first quarter, mostly due to the sluggish sales of EVs amid the coronavirus, according to the firms and analysts.
On April 17, CATL said its net profit during the months of January to March will likely stand between 733 million yuan (KRW 125.8 billion) to 837.7 million yuan to record a 20-30% fall on-year.
BYD, the second-largest battery maker, forecast its net profit to fall between 50 million yuan to 150 million yuan to reflect up to a 93% decline.
Batteries produced by CATL and BYD account for more than half the Chinese market. Their performance is an accurate barometer of how the Chinese battery industry is doing, according to market watchers.
It also means that suppliers for the battery makers are suffering even further. Chinese lithium maker Tianqi expected its bottom line to fall around 115 million yuan in the first quarter. It has received a Caa1 rating from credit ratings firms such as Moody’s, triggering alarm.
However, analysts remained upbeat on prospects for the second quarter, as China’s EV subsidies have been extended for two more years, while battery production has been on the rise since March.
Chinese battery market research firm CBEA said Chinese EV production rose 335% in March compared to the previous quarter. The amount of batteries fitted into EVs rose 363% on-quarter to 2.77GWh, although it fell 45.6% on-year.
The widening appliance of LFP, in which Chinese companies have a global dominance, are also cited as positive factors. LFP is increasingly being applied to ships and Energy Storage Systems. For companies like CATL, BYD and Guoxuan, LFP accounts for around 10-40% of its sales.
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