CATL Shares Slump as Q3 Profit Growth Slows to 14.5%

Shares of Contemporary Amperex Technology Co Ltd (CATL), the world’s largest electric-vehicle battery maker, slumped more than 10% in Shenzhen on Wednesday after the company posted its slowest quarterly profit growth in nearly two years, the South China Morning Post reported. Net profit for July to September rose 14.54% from a year earlier to 21.25 billion yuan (about US$3.2 billion), according to an exchange filing released on Tuesday evening.

The Hong Kong-listed shares also fell about 8.6% in morning trade, the SCMP said, as investors reacted to a result that showed earnings failing to keep pace with a sharp jump in sales.

Profit lags revenue surge

Third-quarter revenue climbed 58.58% year on year to 165.22 billion yuan, according to figures reported by CnEVPost and TechNode. Profit growth, however, slowed markedly from the 36% rise recorded in the second quarter and a peak of 57% in the final quarter of 2025, the SCMP noted.

The Seoul Economic Daily said the profit gain was the weakest in seven quarters and fell well short of a market forecast of 41.2% growth, while revenue also missed an expected 60.2% increase. CnEVPost calculated that quarterly net profit was down 5.77% from 22.55 billion yuan in the second quarter.

For the first nine months, CATL’s net profit attributable to shareholders rose 31.6% to 64.53 billion yuan on revenue of 442.14 billion yuan, up 56.2%. Cost of sales grew faster than revenue, pushing the nine-month gross margin down to 22.72% from 25.31% a year earlier. Operating cash flow fell 23.6% to 61.63 billion yuan, while inventories rose about 53% from the start of the year to 144.77 billion yuan, which the company attributed to business expansion, CnEVPost reported.

Pricing pressure and tax changes

According to the Seoul Economic Daily, Chinese carmakers grappling with overcapacity have been reducing their reliance on CATL to push down battery prices, with Xiaomi and Li Auto signing supply deals with second-tier producers such as CALB and Sunwoda.

Policy changes are adding to the strain. Beijing ended a consumption tax exemption on lithium-ion batteries that dated back to 2015 and began levying a 2% tax last month, a rate set to double to 4% next September, the newspaper said. Authorities have also cut the value-added tax rebate on battery exports and plan to scrap it entirely next year, while official curbs on cut-throat price competition have weighed on earnings.

Analysts have turned more cautious. JPMorgan downgraded the stock to neutral earlier this week, warning that profitability in China’s EV sector was “deteriorating faster than expected”, while Citigroup cautioned that domestic demand for energy storage could also disappoint, the Seoul Economic Daily reported.

What’s next

CATL still dominates the global market. Data from SNE Research cited by CnEVPost show its share of worldwide battery installations rose to 39.4% in the first eight months of the year, well ahead of second-placed BYD at 15.1%. The company has said it remains upbeat about battery demand next year, but analysts warn slowing growth in China’s electric car market and the rising tax burden could keep pressure on margins into 2027. Investors will be watching whether CATL can defend pricing with major carmakers as it continues to expand capacity.

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