Electric battery giant CATL (300750.SZ) saw its China market share tumble to the lowest in more than a year in September, data showed, underscoring the challenges it faces from smaller rivals and weakener demand in the world's largest electric vehicle market.
CATL reports quarterly results on Thursday, and investors will be on the look out for the extent the world's largest EV battery maker bore the brunt of the EV sales slowdown in China and rising pressure from automakers to cut battery prices.
"CATL is facing pressure in the near term, given competition from tier-2 battery makers who price their products at a discount to CATL, and weaker-than-expected lithium-ion battery demand," Citi analysts said in a note.
"This... is an incentive for CATL to offer some price cuts to secure its market share."
CATL's market share by battery installations in China-made EVs dropped to 39% in September, the lowest since June last year, from 45% three months ago, data from the China Automotive Battery Innovation Alliance (CABIA) showed, as rivals accelerated supplies.
Second-ranked BYD (002594.SZ) and third-placed CALB (3931.HK) both boosted their shipments in China by more than 71% in the first nine months of this year, far outpacing CATL's 18.8% growth, according to the data.
CATL's setback also comes amid weakening EV sales in China that stoked an intense price war among automakers and a subsequent cost reduction pressure on battery firms and other suppliers.
China's EV battery installation volume grew 32% in the first nine months, cooling from a 38% gain in the first half and roughly one-third of growth for the same period in 2022, CABIA data showed.
CATL, which counts Tesla (TSLA.O) as its biggest client, is expected to report 14.6 billion yuan ($2.0 billion) in third-quarter net profit, according to one estimate provided by LSEG.
That will be up 55% from a year ago but marks a slowdown from a 63% growth in the second quarter and a 188% surge in the same period a year ago.
In a sign of challenges from outside its home turf, CATL's partner Ford Motor (F.N) said last month that it has paused work on a $3.5 billion EV battery plant in Michigan amid growing concerns by U.S. politicians that it could facilitate the flow of U.S. EV tax subsidies to China.
Shares in Shenzhen-listed CATL dropped 15% so far this year, lagging a 6% drop in broader market (.CSI300).
($1 = 7.3015 Chinese yuan renminbi)
