China’s Contemporary Amperex Technology (CATL), the world’s leading electric vehicle (EV) battery manufacturer, is moving forward with a high-profile listing on the Hong Kong Stock Exchange. The company aims to raise at least $5 billion, making it one of the largest stock offerings in the city in recent years. This follows CATL’s initial public offering (IPO) on the Shenzhen Stock Exchange in 2022, which raised $6.7 billion.
CATL, based in Ningde, Fujian, is a key supplier for major automakers, including Tesla, BMW, Volkswagen, and Ford. The company’s decision to pursue a Hong Kong listing aligns with its broader strategy to strengthen its international presence, particularly in Europe. A significant portion of the funds raised will be used for global expansion, including the construction of a battery plant in Hungary, according to its filing with the Hong Kong Stock Exchange.
Expansion Amid Rising Global Demand
The company currently operates 13 battery manufacturing facilities across China, Germany, and other key markets. It is also working on a joint venture with Stellantis in Spain to establish a new battery plant and has additional projects underway in Indonesia. These efforts highlight CATL’s commitment to meeting the growing demand for EV batteries worldwide.
Despite its rapid growth, CATL faces increasing geopolitical and economic challenges. Trade tensions between China and the United States continue to escalate, with Washington recently imposing a 10% tariff on Chinese imports. While the company’s filing did not directly mention this tariff, it acknowledged the risks posed by global trade restrictions.
Additionally, last month, the U.S. Department of Defense added CATL to its blacklist of companies allegedly linked to China’s military. This designation restricts CATL from securing certain U.S. government contracts. However, the company strongly denied the allegations, calling them a “mistake” and stating that the designation is unlikely to impact its business operations significantly.
Market Dominance and Financial Performance
CATL has maintained its position as the world’s top EV battery supplier for eight consecutive years, holding a commanding 38% share of the global market, according to SNE Research. The company’s batteries are now used in one out of every three electric vehicles worldwide, powering approximately 17 million EVs.
Financially, CATL continues to show strong performance. It reported revenue of 400.9 billion yuan ($54.8 billion) in 2023, with 259 billion yuan ($35.4 billion) generated in the first three quarters of last year. These figures reinforce the company’s position as a dominant force in the EV battery industry.
Foreign Automakers Invest in China
While some international companies are scaling back their operations in China due to economic uncertainties and geopolitical risks, major automakers remain committed to the country’s booming EV market.
Tesla recently began production at its new battery factory in Shanghai, located near its existing EV production facility. Meanwhile, Toyota has announced plans to manufacture EVs and batteries for its Lexus brand in Shanghai under a wholly owned subsidiary, with production set to begin in 2027.
Looking Ahead
CATL’s Hong Kong listing will be a significant milestone in its ongoing expansion strategy. As demand for EV batteries continues to grow, the company is positioning itself to remain at the forefront of the industry. Despite regulatory challenges and international scrutiny, CATL’s dominance in the battery sector and its ambitious global plans underscore its long-term vision for growth and innovation.
