CATL Photo: VCG

Shares of Chinese battery giant CATL fell more than 10 percent in Shenzhen and Hong Kong stock exchanges on Wednesday, while the company pointed to growth potential in global power and energy-storage battery demand in 2027, supported by rising vehicle electrification and expanding storage markets.

CATL's Shenzhen-listed shares were down 12.03 percent at Wednesday's close, while its Hong Kong-listed shares fell 11.413 percent. Results released on Tuesday showed third-quarter revenue rose 58.58 percent year-on-year to a quarterly record of 165.22 billion yuan, while net profit attributable to shareholders increased 14.54 percent to 21.25 billion yuan. But company gross margin fell to 20.69 percent, declining for a second consecutive quarter.

At its earnings briefing on Tuesday, CATL attributed the pressure on profitability to changes in its product mix, the resumption of battery consumption tax, and reductions in export tax rebates. The company management said it was discussing how to share the impact with customers while accelerating the introduction of new technologies and products to limit the impact on profitability, the Securities Times reported on Wednesday.

And, more tax changes are expected in 2027. The consumption tax, reinstated at 2 percent in September, is set to rise to 4 percent in September 2027. And, battery export VAT rebates were reduced from 9 percent to 6 percent in April and are scheduled to be removed in January 2027.

Regarding market demand, however, CATL pointed to more potential opportunities. Responding to investor concerns about 2027, the company cited rising electrification rates and battery capacity per vehicle in China, competitive new electric models in Europe and continued growth in global energy-storage demand.

Industry figures showed continued year-on-year growth in both sales and exports. China's combined sales of power and energy storage batteries rose 57.6 percent to 1,681.7 GWh in the first nine months of 2026, while combined exports increased 51.6 percent to 302.9 GWh, according to data released by the China Automotive Battery Innovation Alliance on October 15. 

In September, combined sales grew 52 percent year-on-year, although they edged down 0.2 percent from August, while exports rose 64.5 percent year-on-year and 3.7 percent month-on-month.

"Global demand for power and energy storage batteries may not be as pessimistic as the market expects," CATL management said at the briefing, adding that there was still considerable growth potential.

Global Times