CATL & Panasonic profits drop due to investments

Competing for the top of the battery value chain comes at a cost as the latest earnings of both CATL and Panasonic show. While China’s cell making powerhouse reports a plus 60% in revenue, their profit fell. Panasonic paints a similar picture and in both cases, investments are weighing heavy – for now.

On the other hand, it is these investments which will ensure their future profits. In detail, CATL saw its revenues surge by 59.85% year on year toB19.136 billion yuan (about 2.4 billion euros). Net profits in the same period dropped by 7.47% to 2.379 billion yuan (over 301 million euros).

Panasonic also reported a drop in profits, particularly in Q3 of this year, when it was down 15 percent to 95.2 billion yen (about 744 million euros).

In both cases, the battery makers can “blame” investments for their losses. Panasonic has been busy upgrading the Gigafactory in order to manage to keep up with demand for Tesla electric vehicles. While Tesla is already seeing a return on investment, Panasonic is still working to set off their 1.6 billion dollars. Still, they are not only expanding the factory in Nevada reportedly but are also thinking to join Tesla in building the Gigafactory 3 in China.

This would bring them straight to the doorstep of CATL. Meanwhile, the Chinese company has been busy expanding their business to other shores as well. The most recent example is the battery cell factory CATL will begin constructing in Erfurt, Germany by 2019 (we reported). It aims to add a production capacity of 14 GWh to CATL’s growing network. Moreover, CATL have gone to set up a series of joint ventures with carmakers in China such as SAIC-GM or GAC.

Also Panasonic has been eyeing Europe for setting up battery cell production here. Together with BYD they had approached the British government but have found the administration to be unhelpful so far (we reported).

gasgoo.com (CATL) reuters.com (Panasonic)