CATL’s Hong Kong-listed shares fell 10.64% to HK$368 on Wednesday, their lowest level since July 2025, after the battery maker reported a quarter-on-quarter decline in third-quarter profit. Its Shenzhen-listed shares lost about 12%. CATL said net profit attributable to shareholders was 21.25 billion yuan ($3.16 billion), up 14.54% year on year but down 5.77% from the prior quarter. Revenue rose 58.58% year on year to 165.22 billion yuan, while gross margin slipped to 20.69%, its second straight quarterly decline.
CATL linked weaker profit per unit to product mix and changes in China’s tax support. A 2% transitional consumption tax on lithium-ion batteries took effect on September 1, with the rate set to reach 4% in September 2027. Separately, the export VAT rebate for battery products fell from 9% to 6% on April 1 and is scheduled to end on January 1, 2027. The rebate cut had a fuller effect in the third quarter because of the gap between shipments and revenue recognition.
The company says it is discussing how to divide the new costs with customers, as the consumption tax is built into product prices. That tax will apply for all of the fourth quarter, compared with September alone in Q3. CATL said future unit profitability will depend partly on cost-sharing talks and sales of higher-margin products. JPMorgan lowered its Hong Kong rating to Neutral and cut earnings estimates, citing tax and trade risks, but kept an Overweight rating on CATL’s A-shares.
CATL considers some of the pressure temporary and expects new products, technology and customer negotiations to support longer-term profits. It also forecast that global demand for power and energy-storage batteries could grow 20% to 30% in 2027, with commercial vehicle electrification, Europe and overseas storage among the drivers.