The world’s largest manufacturer of batteries for electric vehicles (E.V.s), CATL (300750. S.Z.), based in China, said on Thursday that its third-quarter earnings increased 10.7%, marking its lowest quarter since the year’s beginning due to sluggish demand and fierce competition.

Comparatively, the profit increased by 63.2% in the second quarter and 188.4% in the third quarter of 2022.

According to statistics, CATL’s market share in China fell in September to its lowest level in more than a year, highlighting the difficulties it confronts from smaller rivals and declining demand in the world’s largest market for electric vehicles.

It said its net income for the third quarter came to 10.4 billion yuan ($1.42 billion), up 10.7% from last year. Since the first quarter of 2022, when earnings fell by 23.6%, it was the quarter with the poorest increase.

“CATL is facing pressure in the near term, given competition from tier-2 battery makers who price their products at a discount to CATL, and weaker-than-expected lithium-ion battery demand,” a report from Citi analysts stated.

“This… is an incentive for CATL to offer some price cuts to secure its market share.”

According to statistics from the China Automotive Battery Innovation Alliance (CABIA), as competitors increased supply, CATL’s market share for battery installations in E.V.s built in China fell to 39% in September, the lowest level since June of last year and down from 45% three months earlier.

According to the statistics, BYD (002594. S.Z.), which was ranked second, and CALB (3931. H.K.), which was rated third, both increased their exports in China by more than 71% in the first nine months of this year, considerably exceeding CATL’s 18.8% growth.

The decline in CATL’s profit growth also coincides with a decline in E.V. sales in China, which sparked a fierce pricing war between automakers and pressured battery companies and other suppliers to reduce prices.

According to CABIA statistics, China’s E.V. battery installation volume increased by 32% in the first nine months of this year, down from a 38% increase in the first half and almost equal to the growth rate for the same time in 2022.

Ford Motor (F.N.), a partner of CATL, announced last month that it had halted construction of a $3.5 billion E.V. battery facility in Michigan due to rising fears from American legislators that it may enable the flow of U.S. E.V. tax subsidies to China. This is an indication of difficulties from beyond its native territory.

CATL, a company listed in Shenzhen, has fallen around 16% this year, trailing a decline of 8.7% in the broader market (.CSI300).