Tagged: China

CATL confirms it’s negotiating new prices with EV makers

's lithium sharing program is not for price reduction purposes, but rather the company already owns some mineral resources and doesn't want to reap windfall profits, its management said.

Last month it was reported that CATL was pushing a lithium rebate program to electric vehicle (EV) makers to drive down the cost of battery purchases for a handful of customers. Now, for the first time, the power battery giant has acknowledged the move.

CATL's lithium-sharing program is not for the purpose of lowering prices, but rather the company already owns some mineral resources and doesn't want to reap windfall profits, its management said Thursday.

The company released its 2022 annual report Thursday and held an investor call afterward in which its management made those comments, according to a meeting minutes it released today.

CATL hopes to be able to share with long-term strategic customers and is moving forward with relevant communications, the company said.

On February 17, local media outlet 36kr first reported on CATL's plan, saying it was not for all customers, but for several strategic customers including (NYSE: NIO), (NASDAQ: LI), and .

The core terms of the partnership include that CATL will settle a portion of the price of power battery supply with car companies at a rate of RMB 200,000 ($28,720) per ton of lithium carbonate for the next three years.

At the same time, automakers signing the partnership will be required to commit about 80 percent of their battery purchases to CATL, according to the report.

CATL did not confirm the report at the time, though Li Auto and NIO both mentioned the program in their respective subsequent earnings calls.

In response to the rumored new pricing arrangement, Li Auto and CATL were in negotiations, the EV maker said during an analyst call following the February 27 announcement of its fourth-quarter earnings.

Whether it's lithium price concessions or battery prices linked to raw materials, it would be good news if battery prices could be brought back to a rational range, Li Auto's management said.

Asked about the topic during a conference call on March 1, NIO's management said the company is also in the process of discussions with CATL.

"Of course, we will maintain a long-term strategic relationship with CATL, and we are discussing some new pricing mechanisms with them," said William Li, NIO founder, chairman and CEO.

Battery makers also recognize that they must share the price volatility of battery materials with car companies, Li said at the time.

Back at CATL, the company's annual report, released yesterday, showed it posted a 39 percent quarter-on-quarter increase in net profit in the fourth quarter and further improved gross margins to 22.57 percent.

CATL's management, when asked about the lithium industry overhaul in Yichun, Jiangxi, said it had essentially no impact on the company, and its projects there are moving forward as planned.

The overhaul is mainly aimed at correcting the chaos in local lithium mining, which is beneficial to compliant companies in the long run, CATL's management said.

In Yichun, nicknamed the "lithium capital of Asia," local lithium miners have shut down production for an industry-wide overhaul, Yicai reported on February 26.

Analysts fear that this may bring disruption to the lithium supply, thus halting the downward trend in lithium prices. But such fears have not materialized.

Lithium carbonate prices have continued to fall over the past two weeks, with battery-grade lithium carbonate falling to RMB 367,000 per ton on March 9 and industrial-grade lithium carbonate falling to RMB 332,500 per ton, both one-year lows.

($1 = RMB6.9643)

CATL reportedly cutting battery costs significantly for some clients including NIO, Li Auto

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CATL sees Q4 net profit up 39% QoQ, gross margin improves further to 22.57%

's capacity utilization was 83.4 percent in 2022, down from 95 percent in 2021.

CATL saw a solid performance in the fourth quarter, with its key businesses seeing strong growth.

The Chinese power battery giant achieved revenue of RMB 118.25 billion ($16.98 billion) in the fourth quarter, up 107.49 percent year-on-year and up 21.44 percent from the third quarter, according to its annual report released Thursday.

The company's net profit attributable to shareholders reached RMB 13.14 billion in the fourth quarter, up 60.64 percent year-on-year and up 39.49 percent from the third quarter.

CATL's gross margin further improved to 22.57 percent in the fourth quarter, up from 19.27 percent in the third quarter.

Previously, CATL's gross margin continued to decline in 2021, dropping to 14.48 percent in the first quarter of 2022 due to a large increase in battery raw material prices.

CATL's revenue for the full year 2022 was RMB 328.59 billion, up 152 percent year-on-year, and net profit was RMB 30.73 billion, up 92.89 percent year-on-year.

The company's gross margin in 2022 were 20.25 percent, a decrease of 6.03 percentage points from 2021.

CATL's revenue mainly comes from its power battery systems business, energy storage systems business and battery materials and recycling business.

Its power battery systems business generated revenue of RMB 236.6 billion in 2022, up 158.6 percent year-on-year, contributing 72 percent of the company's revenue.

CATL's actual battery systems capacity in 2022 was 390 GWh, up 128.9 percent year-on-year. It has 152 GWh of capacity under construction.

It had 325 GWh of battery system production in 2022, up 100 percent year-on-year, with full-year sales reaching 289 GWh, up 116.6 percent year-on-year.

It has a battery inventory of 70 GWh in 2022, up 75.2 percent year-on-year.

Notably, with rapid capacity expansion, CATL's capacity utilization rate was 83.4 percent in 2022, down from 95 percent in 2021.

CATL's energy storage systems business generated revenue of RMB 44.98 billion in 2022, up 230.16 percent year-on-year, contributing 13.69 percent of total revenue.

Its energy storage systems business saw a large decline in gross margin, which was 17 percent in 2022, 11.51 percentage points lower than in 2021, a much larger decline than other businesses.

This is because energy storage orders are mostly long-term orders, and compared to power batteries, energy storage batteries are more sensitive to price fluctuations, making it difficult to negotiate directly with customers for price increases in the short term.

CATL's battery materials and recycling business generated revenue of RMB 26.03 billion in 2022, up 94.7 percent year-on-year, contributing 7.92 percent of total revenue.

The battery materials and recycling business gross margin remained largely stable, declining only 2.36 percentage points to 21.23 percent in 2022.

Citi analyst Jack Shang said in a research note that CATL's reported results were in line with previous forecasts, and they are bullish on the company's strong pricing power and overseas customer channel as a leader in the battery industry.

Citi raised its earnings forecast for CATL by 4 percent for this year and 2 percent for next year to RMB 39 billion and RMB 49 billion, respectively, maintaining it as a top pick in the industry.

Citi expects CATL's battery sales could reach 402 GWh this year, up 39 percent year-on-year.

($1 = RMB 6.9648)

CATL's share in global EV battery market slips in Jan, BYD rises

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China auto price war: BMW dealers offer discounts of up to $14,360 for i3

A rare price stampede is taking place in the Chinese auto market.

(Image from BMW China Weibo)

As a large number of car companies in China are offering huge subsidies or price cuts, BMW is offering more than 100,000 yuan ($14,360) off its all-electric model, the i3, according to local media.

In the past two days, rumors have surfaced that BMW dealers are offering massive subsidies for the i3 in China, and that consumers who pay full cash for the car can even get the model for RMB 120,000 to 180,000, less than half the retail price.

BMW insiders deny this, local media Cailian reported today. However, salespeople at BMW dealers say they are indeed offering discounts, and that these measures were introduced only this month, according to the report.

For the BMW i3 eDrive35 L, which currently has a guide price of RMB 353,900, the cost after discounts is RMB 248,000, the report said, citing BMW dealership sources.

Consumers will also receive an additional RMB 6,000 subsidy if they trade in their vehicles, the sources said.

BMW officially made the BMW i3 available in China on March 31, 2022, when only one version, the BMW i3 eDrive35L, was offered, and only for the Chinese market.

BMW's suggested retail price for the BMW i3 eDrive35L at the time was RMB 349,900, and its website currently displays a suggested retail price of RMB 353,900.

On February 20, BMW announced the launch of the BMW i3 eDrive40L in China, offering two versions with starting prices of RMB 383,900 and RMB 413,900 respectively.

The BMW i3 eDrive40L is the premium model of the BMW i3 with better performance and a longer range, the company said in a press release.

Notably, in late November last year, a media report said that Chinese consumers were offered discounts of RMB 80,000-100,000 by dealers when purchasing the BMW i3.

There were even dealers offering discounts of RMB 105,000, equivalent to a 30 percent discount, bringing the vehicle's selling price down to around RMB 245,000, Cheshi reported at the time.

These deals seem to have worked to boost sales in the past few months, as the BMW 3 Series BEV, or BMW i3, sold 2,976 units at retail in China in February, placing it as No. 8 on the list of high-end sedans with a starting price above RMB 300,000 in China, according to a list released earlier today by the China Passenger Car Association (CPCA). A list.

In addition to BMW, Mercedes-Benz dealers are also rumored to be offering huge discounts, including up to RMB 110,000 for the Mercedes-Benz C-Class and Mercedes-Benz E-Class.

Cailian today quoted a Mercedes insider as saying there is no such thing. A salesperson at a Mercedes-Benz dealership store in Beijing said that the information circulating on the Internet was untrue and that consumers could only get discounts on their purchases if they registered their vehicles in Beijing.

The Mercedes-Benz C-Class is currently discounted by RMB 60,000 and the Mercedes-Benz E-Class by RMB 50,000, the salesperson said.

The rumors and the dealers' moves come as the Chinese auto industry is staging a rare price war.

Earlier this month, authorities in central China's Hubei province joined forces with a number of local car companies to offer subsidies to consumers for car purchases of up to RMB 90,000 for some models, marking the open entry of fuel models into the price war.

As things stand, car companies are already stampeding each other, Cailian quoted auto industry analyst Zhu Yulong as saying.

The previous price cuts by Tesla had a big impact on the car market, and whoever acts first now will have a head start, Zhu said.

For the internal combustion engine vehicle market, new emission standards that will come into effect on July 1 are one of the major factors that will cause them to cut prices.

China will start enforcing national standard 6b in the second half of the year, which is described as the world's most stringent emissions standard and will force car companies to try to clear their inventories by July, Cailian said, citing a source from consulting firm Ways.

It is worth noting that the sharp price cuts by ICE car companies, which appeared in the process of reducing prices or offering discounts by electric vehicle companies, also brought an impact to the NEV industry.

Earlier today, announced that consumers who order the BYD Song Plus series from March 10 to March 31 will receive a discount of RMB 6,800, or RMB 8,800 for the Seal.

(1 $= RMB 6.9643)

Automakers in central China's Hubei offer hefty subsidies as sales pressure mounts

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BYD offers discounts for Song and Seal as China’s auto price war intensifies

Consumers who order 's Song Plus lineup this month will receive a discount of RMB 6,800, or RMB 8,800 for the Seal.

(Image from BYD's Weibo)

As the price war intensifies in China's auto industry, BYD has also started offering discounts for its two models, even though the official prices remain unchanged.

Starting tomorrow, consumers who order BYD's Song Plus lineup can get a discount of RMB 6,800 ($980), or RMB 8,800 for the Seal, according to a BYD Weibo post today.

This is a limited-time marketing campaign valid from March 10 to March 31, BYD said.

BYD did not provide more details, but the Song family, as well as the Seal, are among its best-selling models.

BYD sold 193,655 new energy vehicles (NEVs) in February, including 191,664 passenger cars and 1,991 commercial vehicles, the company said in figures released on March 1.

Song family models sold 52,400 units in February, BYD's highest sales in the month, contributing 27 percent of all its passenger car sales.

Song family models include the hybrid Song Pro and Song Max, both of which are part of BYD's Dynasty lineup.

The family also includes the hybrid Song Plus DM-i and the all-electric Song Plus EV, which are part of BYD's Ocean series.

BYD announced today that the offer is limited to these two Song models in the Ocean series, as well as the Seal.

BYD's Seal sold 7,754 units in February, which was up 17.17 percent from 5,043 units in January. The model went on sale on July 29, 2022.

Since the end of last year, several EV makers have cut prices, including and (NYSE: XPEV).

Earlier this month, authorities in central China's Hubei province joined forces with a number of local car companies to offer subsidies for consumers to purchase vehicles, with some models offering subsidies of up to RMB 90,000, marking the open entry of fuel models into the price war.

The first to participate are the Dongfeng Motor family of brands, including Dongfeng Honda, Dongfeng Nissan, Dongfeng Citroen, Dongfeng Peugeot and Dongfeng Aeolus, with the Dongfeng Citroen C6 offering a combined subsidy of up to RMB 90,000.

($1 = RMB 6.962)

Automakers in central China's Hubei offer hefty subsidies as sales pressure mounts

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Tesla Model Y ranks No. 2 in top-selling SUVs in China in Feb

Song was the best-selling SUV in China in February with 51,592 retail sales, and the Model Y ranked No. 2 with 25,526 units.

TSLA.US

The (NASDAQ: TSLA) Model Y was the No. 2 best-selling SUV in China in February, with the BYD (OTCMKTS: BYDDY) Song taking the top spot by a significant margin.

Model Y retail sales in China in February were 25,526 units, up 37.3 percent from 18,593 units a year ago, according to data released today by the China Passenger Car Association (CPCA).

That puts the Tesla SUV at No. 2 on the list of best-selling SUVs in China, according to the CPCA's list.

The BYD Song topped the list with 51,592 retail sales in February, up 110.3 percent from 24,532 units in the same month last year.

BYD Yuan Plus retail sales in February were 20,279 units, up 349.1 percent from 4,515 units in the same month last year, and ranked third on the list.

In January-February, BYD Song retail sales were 101,301 units, up 115.6 percent year-on-year, making it the best-selling SUV in China for the first two months.

The Tesla Model Y came in second on the list with 39,710 units in the same period, up 13.6 percent year-on-year, and the Changan CS75 came in third with 35,030 units.

Notably, this is the first time the CPCA has not placed the Model Y in the ranking of high-end SUV sales with a starting price above 300,000 yuan ($43,080).

In the CPCA's previous lists, the Model Y has appeared in the premium SUV sales rankings, even though its starting price has been below RMB 300,000 after two major price cuts.

Tesla Model 3 sales in February were 8,397 units, up 82.3 percent from 4,607 units a year ago, according to the CPCA.

This puts the Model 3 at No. 7 among the best-selling new energy sedans in February.

The BYD Qin was the best-selling new energy sedan in February, with the NIO ET5 ranking 10th on the list with 6,471 units sold.

In January-February, the Tesla Model 3 retailed 21,056 units in China, placing it at No. 6 on the list of best-selling new energy sedans.

The ET5 sold 12,266 units in January-February, ranking No. 9 on the list.

($1 = 6.9661 RMB)

NIO ET5 drops 1 spot in ranking of top-selling premium sedans in China

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