Largest Electric Vehicle Battery Producer Aims for High-Profile IPO in Hong Kong
Leftover battery titan aims to collect at least $5 billion, as per Reuters reports. This would mark CATL's second listing, following its successful $6.7 billion raise on China's Shenzhen exchange in 2022.
Located in Ningde, Fujian, this battery juggernaut supplies giants such as BMW, Volkswagen, and Ford. CATL announced its intention to list on Hong Kong's Exchange last December, in a bid to expand its global reach.
A portion of the funds will be allocated for expanding their presence in areas like Europe, specifically for constructing the Hungarian plant. This information emerged from a draft application submitted by CATL to the Hong Kong Stock Exchange on Tuesday.
Specifics like share count and the exact sum of funds were withheld in the draft. Additionally, a definitive date for the listing remains unspecified. CNN reached out to CATL for further clarification.
As of the previous year, CATL operates 13 factories worldwide, including facilities in China and Germany. Lately, they've announced a joint venture in Spain with Stellantis, the brand owner of Fiat and Chrysler, for constructing a battery plant. They're also venturing into projects in Indonesia.
The planned Hong Kong listing unfolds against a backdrop of geopolitical strife, with potential risks including tariffs affecting CATL's operations, as mentioned in their application. They overlooked the 10% tariff imposed by former U.S. President Donald Trump on Chinese imports.
Last month, the Pentagon blacklisted CATL, suspecting ties with the Chinese military, barring them from U.S. Department of Defense contracts. CATL responded to this allegation, terming it a mistake, with plans to address the misclassification with the Department of Defense.
They believe this designation will only restrict their interactions with a few U.S. governmental entities, causing minimal impact on their overall business operations as stated in their filing.
The company reclaimed the title of the world's largest electric battery supplier for the eighth consecutive year in 2024, holding a massive 38% of the global market share, according to SNE Research. By late last year, their batteries were powering approximately one out of every three electric vehicles globally, serving almost 17 million vehicles.
CATL posted a record 400.9 billion yuan ($54.8 billion) in revenue for 2023, and 259 billion yuan ($35.4 billion) in the first three quarters of the year, as per their statements.
Amidst dwindling interest from foreign companies due to escalating geopolitical troubles and economic woes, some automakers are investing heavily in China's flourishing auto market.
Electric vehicle giant Tesla began producing batteries in its Shanghai factory on Tuesday, as reported by Xinhua – China's official news agency. Toyota, on the other hand, announced last week their plans to manufacture EVs and batteries for the Lexus brand in Shanghai by 2027, under a wholly-owned entity.
In its bid to expand its global business, CATL has planned to allocate a portion of the funds from its upcoming Hong Kong listing for expanding their presence in Europe, specifically for constructing the Hungarian plant. This move showcases CATL's strategic approach to leveraging technology (tech) in the dynamic and competitive electric vehicle (business) market.
CATL's foray into European markets is not just an expansion of its physical presence but also a strategic move to tap into the evolving tech landscape of the region, as many European countries focus on promoting sustainable technologies and transitioning towards electric vehicles.
