- Tesla supplier CATL rose 13% in its Hong Kong trading debut on Tuesday morning.
- The IPO raised $4.6 billion, primarily to fund its European expansion.
- CATL competes with Tesla and BYD in the EV battery supplier market.
Key Tesla supplier CATL rose 13% in its Hong Kong trading debut on Tuesday morning.
The world’s largest battery maker filed to go public in Hong Kong earlier this year, primarily to fund its European expansion. CATL has been listed on the Shenzhen Stock Exchange since 2018.
The initial public offering raised HK$35.7 billion, or $4.6 billion, according to a company filing. That size makes it one of the largest global listings of the year. The stock was listed at HK$263 per share.
Companies pursue dual listings — where a company is traded on more than one exchange — because it gives them access to more capital and lets their shares trade for a longer time if the exchanges are in different time zones. Hong Kong listings are a popular option for Chinese companies because they allow international investors to buy stock.
In a document filed with the Hong Kong exchange in February, CATL said that part of the money raised will be used to build a $7.6 billion battery plant in Hungary. The rest will be used for daily business. CATL has a partnership with Jeep and Fiat maker Stellantis in Spain.
CATL is a major supplier to Tesla, selling lithium-iron phosphate batteries to its Shanghai factory.
Last week, HSBC analysts led by Elaine Chen wrote in a note that CATL has a “dominating domestic position” in the EV battery market, enabled by “continuous products upgrade and innovation.”
They added that they see the company “unlock more volumes opportunities in Europe on its superior-than-peers affordability and leading lithium iron phosphate (LFP) technology.”
CATL is ramping up competition against Tesla and Chinese EV star BYD.
Late last month, CATL unveiled a new battery it said can out-charge BYD and Tesla. It launched an updated version of its Shenxing battery, which it said allows electric vehicles to add 520 kilometers, or 323 miles, of range in just five minutes of charging.
EV companies are trying to cut charge times to entice buyers who are wary of switching to electric.
In January, the Department of Defense added CATL to its list of “Chinese military companies” operating in the United States. CATL denied it had any association with the Chinese military and said it was prepared to contest the decision with legal action if necessary.
