By Jiahui Huang


Chinese battery giant Contemporary Amperex Technology reported robust first-quarter profit growth despite a slowdown in electric-vehicle sales in China.

The Tesla supplier's profit climbed even as changes to government subsidies and tax benefits dented demand in China for EV batteries.

Net profit rose 48.5% to 20.74 billion yuan, equivalent to $3.04 billion, the company said late Wednesday. Revenue climbed 52.5% to 129.13 billion yuan.

Shares rose sharply Thursday morning after the results, rising 9.5% in Hong Kong and 5.8% in Shenzhen.

"We continue to like CATL on its market leadership and industry-leading profitability," Nomura analysts said in a note.

CATL, which commands a 46% share of the Chinese EV battery market, has contracts with global automakers like Volkswagen, BMW and Geely.

The surge in oil prices due to the Middle East conflict could prompt more consumers to buy EVs as they face higher prices at the pump, HSBC analysts said.

The Ningde, Fujian-based company is also well-placed to cash in on its pivot toward energy storage systems, another part of the broader battery industry it has established a dominant position in, analysts said.

The war in the Middle East has heightened concerns about energy security, boosting interest in renewable energy and storage solutions, analysts at Bernstein said.

According to SNE Research data, CATL held a 30% slice of the energy storage system battery market in 2025.

HSBC views CATL as one of the companies best-positioned to capture the next phase of growth in energy storage, citing its rapidly growing energy storage system exposure, supported by a strong cash position.

Higher prices for lithium and copper in the first quarter--driven in part by the conflict--have pressured the company's margins, but Bernstein analysts say the squeeze is likely to be short-lived as CATL can pass on costs.

CATL said last week that it planned to acquire a 49% stake in Hangzhou Zhongheng Electric, a supplier of data-center power equipment, for the equivalent of about $600 million, a move aimed at expanding into the fast-growing market for data-center infrastructure energy systems amid a global surge of AI development.

Shares of the company have held up relatively well during the recent market turmoil caused by the Middle East conflict. The stock is up about 23% year to date in China and 41% higher in Hong Kong, reflecting investor confidence in CATL's dominant position in the battery industry.


Write to Jiahui Huang at jiahui.huang@wsj.com


(END) Dow Jones Newswires

04-15-26 2341ET