Chinese firm Contemporary Amperex Technology Co., Limited (CATL), the world's leading maker of electric vehicle batteries, has reported a significant increase in first-quarter profit, despite signs of slowing demand in the electric vehicle market. According to a statement released on the Shenzhen Stock Exchange, CATL's net profit for the first quarter jumped by 32.9 percent year-on-year to 13.96 billion yuan ($1.91 billion). During the same period, sales rose by 6.2 percent year-on-year to 84.7 billion yuan.

Founded in 2011 in Ningde, a city in eastern China, CATL has rapidly risen to prominence, now producing more than a third of all electric vehicle batteries sold worldwide. The company collaborates with major automotive brands, including Tesla, Mercedes-Benz, BMW, and Volkswagen, solidifying its position as a key player in the global EV industry.

CATL's success has been supported by strong financial backing from the Chinese government, which has strategically focused on bolstering domestic capabilities in high-tech sectors. This support has been crucial in enabling CATL to expand its production capacity and technological advancements.

However, the electric vehicle market, particularly in China, is showing signs of deceleration after years of rapid expansion. This slowdown is attributed to a broader decline in consumer spending and market saturation. CATL had previously cautioned about a potential sales slide, citing a decrease in raw material prices, such as lithium carbonate, which necessitated price adjustments.

The decline in lithium prices, driven by market oversupply and reduced consumer demand for EVs, has intensified price competition within China's expansive EV sector. This intense competition is placing significant pressure on smaller firms to maintain financial viability.

In response to these global market dynamics, CATL is expanding its manufacturing footprint internationally. The company is currently constructing its second factory in Hungary, adding to its existing facility in Germany, which was launched in January 2023. This strategic expansion aims to enhance CATL's global presence and mitigate risks associated with regional market fluctuations.