Contemporary Amperex Technology Co. Limited (CATL), the largest Chinese lithium-ion EV battery manufacturer, noted a pretty good third quarter as both sales and net income improved year-over-year.

This is especially great news after a weak first half of the year. The rate of growth is not high, but as the Chinese plug-in market is finally rebounding, it should be only better from now on.

CATL Q3 2020 results:

  • Total revenues: 12.7 billion yuan ($1.89 billion), up 0.8% year-over-year
  • Net profit: 1.42 billion yuan ($211 million), up 4.2% year-over-year

If we compare revenues with net profits, we get a surprisingly high 11.2% net margin, which sounds like quite a lot for lithium-ion cells, which this day and age become more of a commodity. We were expecting several percent at best. There is always a possibility that there were significant other/additional revenue sources than batteries.

If the EV battery business is and will remain as profitable, CATL should have plenty of funds for the further expansion and R&D to offer even better batteries in terms of performance (energy density, charging time), cost and safety.

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