EV battery leader CATL released its annual report for 2021 on April 21. According to the report, CATL’s annual revenue exceeded RMB 10 billion for the first time thanks to the rapid growth of the EV (or NEV) industry. On the same day of the publication of the annual report, CATL also issued another notice stating that it will invest no more than RMB 13 billion to build a battery production complex in Xiamen, a city in China’s Fujian Province.
Net Profit Surged by 185% to Reach RMB 15.9 Billion for 2021
CATL’s revenue for 2021 grew massively by 159.06% from the preceding year to RMB 130.356 billion. Its net profit for the same year also registered a huge increase of 185.34% from the preceding year, coming to RMB 15.931 billion. Looking at the sales of Li-ion batteries in 2021, CATL raised the annual total volume by 184.82% from the preceding year to 133.41GWh. Of that total, EV batteries accounted for 116.71GWh and registered a 162.56% year-on-year increase.
Turning to revenue by product, CATL sold RMB 91.49 billion worth of EV battery systems in 2021, up by 132.06% from 2020. EV batteries still comprise the largest portion of the company’s revenue stream, but the share figure did drop to 70.19% in 2021 from 78.35% in 2020.
In its report, CATL stated that it continued to strengthen its long-term partnerships with domestic and foreign automotive companies during 2021. Examples of the company’s clients in the automotive industry include Tesla, Hyundai, Ford, Mercedes-Benz, Great Wall Motor, Li Auto, and NIO. In particular, Tesla has emerged as the company’s largest client. CATL’s battery sales to Tesla came to RMB 13.039 billion in 2021.
CATL was also redoubling its R&D efforts in 2021. The second generation of its cell-to-pack LFP products reached the mass production and shipment stage. Furthermore, full-scale adoption commenced for its high-voltage ternary batteries among EV models with a driving range that is within 700km. On the subject of technological and technical advancements, CATL has achieved an energy density of 200Wh/kg for the LFP cells shipped to its clients. Additionally, its second-generation battery systems that forgo conventional thermal dissipation mechanism have been accepted by many domestic and foreign clients.
CATL noted that orders from and shipments to foreign clients expanded considerably in 2021, thus indicating that the company’s sales operations in overseas markets are gradually maturing. The revenue from overseas markets increased by 252.47% year on year to RMB 27.872 billion. Likewise, the share of overseas markets in the annual total revenue grew significantly from 15.71% in 2020 to 21.38% in 2021. The gross margin of the overseas business deals as a whole came to 30.48% in 2021.
Besides the strong sales of its EV battery systems, CATL also achieved high growth for its businesses related to energy storage systems and lithium battery materials. According to the report, sales of energy storage systems and materials respectively contributed 11.86% and 10.45% of the company’s revenue in 2021. In terms of year-on-year growth, sales of energy storage systems soared 601.01% to RMB 13.624 billion, and sales of materials also rose sharply by 350.74% to RMB 15.457 billion. Among the different product categories, energy storage systems registered the largest revenue growth.
With respect to CATL’s management of its supply chain, the company experienced tight supply for upstream materials such as cathode materials, anode materials, separator films, electrolyte solutions, etc. during 2021. Therefore, the company had expanded or deepened its partnerships with “high-quality” suppliers. Likewise, the company was also working closely with equipment providers. As for battery metals and raw materials, CATL continued to seek and secure more sources of lithium, nickel, cobalt, and phosphorous.
CATL also reported that it has been developing its battery recycling capacity in advance. The company claimed that it currently possesses leading-edge processing technologies for battery recycling and can achieve a recovery rate higher than 99% for cobalt, nickel, and manganese. Last year, CATL’s subsidiary Brunp was building a base for closed-loop or integrated battery recycling and material production in China’s Hubei Province. Moreover, Brunp is also collaborating with German chemical supplier BASF to expedite the development of a battery recycling business and capture related opportunities in the wider European market.
RMB 13 Billion Will Be Allocated to Further Expand Production Capacity in Fujian
According to CATL’s consolidated financial statement, the company’s cumulative profit available for dividend distribution came to RMB 34.095 billion at the end of 2021. The parent company’s cumulative profit available for dividend distribution, in particular, came to RMB 23.902 billion at the end of 2021.
CATL stated that it will be undertaking major investment projects that require significant expenditures in the next 12 months. Furthermore, the company is currently issuing shares to specific parties. Therefore, the board of directors has recommended that for the year under review no cash dividend will be paid, no bonus share will be issued, and no capital increase will be made by the capitalization of capital reserve (provident fund). The remaining undistributed profit will be carried forward to the future year.
Turning to capacity expansion projects, CATL sped up the pace of implementation during 2021 as it held a huge cash reserve and was eager to take advantage of the growing market demand for lithium batteries. The company annual total production capacity for batteries more than doubled from 69.1GWh in 2020 to 170.39GWh in 2021. In accordance with the distribution of demand, CATL has established production bases in Zhaoqing (Guangdong Province), Yichun (Jiangxi Province), Guiyuang (Guizhou Province), and other locations in China.
CATL is headquartered in Ningde, a city in China’s Fujian Province. Hence, the company has been continuously expanding its production capacity within that region. On the same day of releasing its annual report for 2021, CATL announced that it will set up a new battery production complex in Xiamen. The total investment in this project is estimated to be within RMB 13 billion. Just a few days ago, CATL secured lithium prospecting rights in Yichun with a bid price of RMB 865 million. Hence, the announcement of a new greenfield project in Xiamen appears to be linked to the successful bid for the lithium clay deposit in Yichun.
On the other hand, CATL already established a battery manufacturing subsidiary in Xiamen earlier on July 7 last year. This subsidiary, which is wholly owned by the parent company, is involved in the production and sale of batteries and advanced materials used in electronics. It is also making the preparations for the construction of the battery production complex.
CATL also held a groundbreaking ceremony for another production complex in the Xiamen Torch High-Tech Industrial Development Zone on December 19 last year. Local Chinese news outlets have reported that this advanced production complex, which entails a total investment of RMB 7 billion and spans an area of around 710,000 square meters, represents the “first phase” of a major integrated battery production hub that the company is currently developing. The production complex in the development zone will be used to manufacture a new type of Li-ion batteries for powering EVs.
CATL stated that the capacity expansion projects that it is undertaking fit into its development strategy. Once up and running, the new production facilities will contribute to the scaling up of the company’s output and thereby enable the company to meet future needs related to growing business and gaining market share. All in all, the company considers long-term and stable growth as it pursues new ventures.
This article is a translation of a Chinese article written by Martin at TrendForce. It contains information that is either sourced from other news outlets or accessible in the public domain.