Last March, China’s President Xi Jinping stated he had mixed feelings about his country’s rapid expansion in electric vehicle batteries. That raised questions about profitability for the industry.

This week’s trading update from world-leader Contemporary Amperex Technology Co. Ltd. proved those wrong. The battery group’s full-year earnings should handily beat analyst expectations. 

The company, better known as CATL, now anticipates net income between Rmb42.5bn and Rmb45.5bn ($6.3bn). At the top end that is a nearly 50 per cent increase from the previous year, a pleasant surprise for investors and analysts. They have fretted about slowing global demand for EV sales and the risk of squeezed margins as local rivals rapidly pile on production capacity.