CATL profit rises 14.5% in third quarter, slowest pace in nearly two years
Key Facts
Chinese battery maker CATL's net profit rose 14.5% year on year to 21.2 billion yuan in the third quarter of 2026, Reuters reported, citing a stock exchange filing. Profit growth fell short of analysts' expectations for a 41.2% increase, according to LSEG estimates cited by the news agency. Reuters described the growth rate as the slowest in nearly two years. The agency linked the slowdown to intensifying competition in the sector. It also pointed to slowing growth in Chinese car sales among the pressures surrounding the company's results during the period.
CATL's quarterly revenue, meanwhile, rose 58.6% from the same period a year earlier, according to Reuters. Revenue reached 165.2 billion yuan, growing faster than net profit during the quarter. The company had reported a 36.5% year-on-year increase in profit in the second quarter. Net profit for that quarter reached 22.5 billion yuan, according to the agency's earlier coverage of the company's results. Second-quarter results beat analysts' expectations at the time, supported by the energy storage business, before the company posted slower growth and lower profit in the third quarter than in the preceding quarter.
Pressure on profit margins had already emerged in the first-half results for 2026, according to Reuters. The gross profit margin for energy storage batteries fell to 24.0% during that period. The margin in the same business was 25.5% in the first half of the previous year. In electric vehicle batteries, the gross profit margin declined by 1.8 percentage points from the corresponding period to 20.6%. Electric vehicle batteries remained CATL's largest segment, according to the agency, as margins declined in both that business and energy storage during the first half.
In its expansion outside China, CATL announced the start of trial production at its new battery cell plant in Debrecen, Hungary, on 22 September 2026, as part of its expansion in serving European automakers. The company said the trial phase aims to prepare, optimise and validate production equipment and manufacturing processes before series production begins. In Egypt, CATL signed a cooperation agreement with BME to support local battery pack assembly and production. The Egyptian plant's planned initial annual production capacity is 1 gigawatt-hour, according to a CATL statement. The partner company plans to increase annual capacity to 5 gigawatt-hours over the long term.
CATL's initiatives also include truck batteries, with the company announcing specifications for the top configuration of its "Tectrans 2" system. The company said this configuration offers a range of up to 1,000 kilometres. It added that it enables charging to 80% in 25 minutes, according to the specifications it announced for the system. Under a long-term cooperation agreement with Seres announced in October, the second phase of the joint plant project targets annual production capacity of between 10 and 12 gigawatt-hours. The agreement also includes joint efforts to explore overseas markets in Europe, the Middle East and Central Asia, according to CATL's statement on the cooperation.
In the storage business, Kevin Tang, CATL's director of energy storage systems for Europe, linked demand growth to the expansion of renewable energy. "Once we have more renewable energy, we need energy storage," he said in remarks reported by Investing.com. The website had quoted a company official in June 2026 as saying energy storage accounted for about 25% of CATL's global sales at the time of the remarks. The official expected the business's contribution to company sales to rise in the coming years. He identified 2030 as the horizon for energy storage to account for half of CATL's global sales.