China’s electric vehicle (EV) battery makers saw their combined net profit in the first half of the year nearly double that of the country’s major carmakers, widening the profitability gap amid weakening domestic demand for EVs.
Seven major battery manufacturers, including Contemporary Amperex Technology Limited (CATL), recorded a net profit of over 50 billion yuan (US$7.4 billion) during the January-June period, up 49 per cent year on year, according to the companies’ exchange filings.
However, China’s 11 major EV makers, from BYD to Great Wall Motor, saw their combined interim net profit shrink by 19 per cent over the same period to 28.8 billion yuan.
The combined net profit of the seven battery makers was 75 per cent higher than that of the 11 listed EV makers in the first half, compared to a minor lag of 4.56 per cent for the same period one year ago.
“Profits have diverged sharply between upstream and downstream sectors,” said Cui Dongshu, secretary general of the CPCA, in his social media post on Friday. “This reflects how price wars are severely squeezing downstream’s room to operate, while profits along the supply chain are highly concentrated among leading upstream companies.”
Notably, three out of six smaller EV battery players, EVE Energy, CALB Group and Gotion High-Tech, reported three-digit profit growth in their first-half net profit. This is faster than CATL’s 42 per cent profit increase, though the Fujian-based giant contributed over 85 per cent of the combined net profits.
