CATL shares listed in Hong Kong dropped 10.64 percent to HKD 368, reaching their lowest point since July 2025. Simultaneously, the company's shares on the Shenzhen exchange declined by approximately 12 percent.
The battery manufacturer reported a third-quarter net profit of ¥21.25 billion, representing a 14.54 percent year-on-year increase but a 5.77 percent decrease compared to the second quarter. Quarterly revenue reached ¥165.22 billion, while the gross margin fell to 20.69 percent.
Profitability is under pressure due to a new 2 percent consumption tax on lithium-ion batteries introduced on September 1, which is set to increase to 4 percent by September 2027. Additionally, the value-added tax export rebate for battery products was reduced from 9 percent to 6 percent in April, with a full elimination scheduled for January 1, 2027.
CFO Zheng Shu stated that the company is currently negotiating cost-sharing arrangements with customers to offset the tax burden. JPMorgan has downgraded CATL's Hong Kong shares to Neutral, citing concerns over industry-wide profitability deterioration.
Despite current challenges, CATL management expects global demand for power and energy storage batteries to grow by 20 to 30 percent in 2027. The company plans to rely on new products and technologies to support long-term profitability.
