CATL's profit growth cools sharply, shares tumble
The move
CATL, the world's largest battery maker, reported third-quarter net profit of 21.25 billion yuan ($3.16 billion), up 14.5% from a year earlier but down 5.8% from the prior quarter, well short of the roughly 41% growth analysts had expected. Revenue rose 58.6% to 165.2 billion yuan. Gross margin narrowed to 20.69%, its second straight quarterly decline. CATL said a reinstated consumption tax on lithium-ion batteries and a cut to export tax rebates both weighed on profit per unit. Shares fell more than 12% in both Shenzhen and Hong Kong the day after the results, with the Hong Kong stock hitting its lowest level since July 2025. Founder Robin Zeng has lost an estimated $14.9 billion since March as the stock has fallen.
Why it matters
It shows that even the dominant player in EV batteries, with revenue still growing fast, cannot fully offset new taxes and a smaller export rebate at the margin line.
The bear case
Nine-month profit is still up nearly 32% year over year, and CATL's market share and revenue growth remain far ahead of rivals.
What to watch
Whether the lithium-battery consumption tax and lower export rebates continue to compress margins in the fourth quarter.
