China's CATL to produce next-generation EV battery in 2023

© Reuters. FILE PHOTO: People walk past the R&D centre of Contemporary Amperex Technology Ltd (CATL) in Ningde, Fujian province, China, December 16, 2016. REUTERS/Jake Spring/File Photo

SHANGHAI (Reuters) - Chinese battery giant CATL will start mass production next year of its latest generation product, with greater efficiency that lets electric cars drive longer distances on each charge, the company said on Thursday.

The world's biggest battery maker is scrambling to retain its top position against competition from rivals such as BYD, which will soon start supplying batteries to Tesla (NASDAQ:TSLA).

CATL's new battery, called Qilin, will boost volume utilisation rate to 72%, the world's highest, versus 50% for its first generation launched in 2019, the firm said, and increase the battery system's energy density to 255 Wh/kg.

But the firm did not say if any electric vehicle maker had placed orders for the new battery.

CATL, which supplies batteries supplier to automakers such as Tesla, Volkswagen (ETR:VOWG_p), BMW and Nio (NYSE:NIO) suffered a fall of 24% in first-quarter net profit, hit by soaring metal costs.

In May, the company said it expected a better profit margin in the second quarter, after raising prices and passing on costs to automaking clients.

CATL sold the equivalent of 41.5 GWh of batteries in the first four months, more than double the sales of second-placed LG Energy Solution, Seoul-based SNE Research says.

As it ramps up overseas expansion, CATL is in the final stages of vetting sites in the United States to build electric vehicle batteries, Reuters has reported.

The firm, based in the city of Ningde in the southern province of Fujian, has said it would start supplying cylindrical cells to BMW from 2025 for a new series of electric vehicles.

Tesla is also ramping up output of its "4680" batteries that hold about five times the energy of the existing 2170 cells.