CATL, China’s largest electric vehicle battery maker, warned first-quarter profits will fall sharply because of a drop in EV production across the country.
Net profit for the period is estimated to range from 733 million yuan ($104 million) to 838 million yuan, CATL said last week in a filing on the Shenzhen stock exchange, where it is listed.
The forecast represents a drop of 20 to 30 percent from the same period last year.
CATL blamed the slump on the severe contraction in domestic EV output during the first quarter.
EV production, disrupted by the coronavirus outbreak, tumbled 62 percent to about 77,000 in the period, according to the China Association of Automobile Manufacturers.
The company plans to cut manufacturing costs and operating expenses to mitigate the downturn’s impact on its financials, CATL said.
In 2019, the company’s net profit rose 29 percent to approach 4.4 billion yuan while revenue surged 58 percent to 45.5 billion yuan.
CATL, based in Ningde of east China’s Fujian province, produces EV batteries in Ningde as well as in Liyang of east China’s Jiangsu province and Xi’ning in northwest China’s Qinghai province.
At the end of 2019, the three plants had combined annual battery cell production capacity of up to 31.7 gigawatt-hours, accounting for 51 percent of China’s overall total, according to the China Industrial Association of Power Sources.