Contemporary Amperex Technology (CATL), the world’s largest electric vehicle (EV) battery manufacturer, has reported a 34 per cent year-on-year increase in net profit for the second quarter of 2025. The strong results come despite weakening global demand for EVs, falling battery prices, and intensifying geopolitical and economic uncertainties.
Profit growth surpasses expectations
According to a filing with the Hong Kong stock exchange on 31 July, CATL’s net profit reached 16.5 billion yuan (US$2.3 billion) in the quarter ending June, exceeding analyst estimates. This follows a 32.9 per cent profit increase in the first quarter, indicating continued financial strength.
Second-quarter revenue also showed resilience, growing 8.3 per cent to 94.2 billion yuan compared with a 6.2 per cent increase in the previous quarter. A key driver of growth was the company’s battery materials and recycling segment, which achieved a 26.42% gross margin, more than three times its margin from the same period in the previous year. This contributed to a 1.57 percentage point rise in the firm’s overall gross profit margin.
Despite these positive figures, the company’s core power battery division saw its gross profit margin decline to 22.41% in the first half of 2025, compared with 23.48% a year earlier. This drop reflects broader challenges in the EV market, including an ongoing domestic price war in China and reduced consumer spending amid global uncertainty.
Major share sale funds international expansion
CATL’s recent strong financial performance follows a landmark fundraising event. In May, the company raised US$5.2 billion through an initial public offering in Hong Kong—the largest listing in the city this year. The funds are earmarked for expanding CATL’s manufacturing presence abroad, where international operations currently contribute around 30 per cent of the firm’s total revenue.
The move is part of a broader effort by CATL to strengthen its global footprint in response to escalating US tariffs and rising protectionism, which have created obstacles for Chinese manufacturers. Meanwhile, within China, a highly competitive price war continues to put financial pressure on automakers and their suppliers, including battery producers.
Investment strategy targets supply chain resilience
To address both domestic and global headwinds, CATL is pursuing a diversified investment strategy that focuses on both downstream and upstream growth. According to data from the corporate research platform Tianyancha, the company invested in multiple sectors last year. These include two car manufacturers, three firms involved in EV charging and battery swapping, two energy storage enterprises, and five power companies.
One of CATL’s key areas of development is its work on a dedicated EV chassis, intended to help automakers accelerate vehicle development timelines. At the same time, the company is expanding its interests upstream. Earlier in July, CATL and its rival, battery producer BYD, signed agreements with Australian mining giant BHP. The partnership aims to boost innovation in battery technology and support the electrification of mining operations.
These strategic moves reflect CATL’s ambition to maintain its leadership in the EV battery sector while building a more robust and flexible supply chain in response to evolving global market conditions.
