Kristina Roberts
The world’s biggest electric vehicle (EV) battery maker, Contemporary Amperex Technology Co Limited (CATL), saw its shares rise sharply on its first day of trading in Hong Kong. The company, which supplies batteries to Tesla, Volkswagen, and Toyota, made the largest initial public offering (IPO) of the year.
Despite tensions between the US and China, investors showed strong interest in CATL’s stock, pushing its price up by 18% at one point. The company is already listed in Shenzhen, China, where it is valued at over 1 trillion yuan ($138.7 billion).
Why CATL’s IPO Matters
CATL makes more than one-third of all EV batteries sold worldwide. Its success is closely tied to the growing demand for electric cars. However, the company has faced challenges because of the US-China trade war and concerns from American lawmakers.
In January, the US Department of Defense added CATL to a list of companies it claims work with China’s military. CATL denies this, calling it a “mistake.” Still, this has not stopped the company from expanding globally.
Strong Market Performance Despite US Concerns
Neil Beveridge, head of research for Asia at Bernstein, said, “The performance of the stock was very good in what is going to be a key IPO for Hong Kong given the size of the listing.”
CATL makes most of its money in China, with nearly 70% of its revenue coming from the country. Because it sells very little in the US, it is mostly protected from higher tariffs imposed by former President Donald Trump.
“The direct implications of what we are seeing with tariffs will only have a limited effect on the company,” Beveridge told the BBC.
How CATL Became a Global Leader
Founded in 2011 in Ningde, China, CATL grew quickly thanks to China’s booming EV industry. Today, it has 13 factories worldwide and employs over 100,000 people.
The company is building its second European factory in Hungary after opening one in Germany in 2023. It also partnered with Stellantis (owner of Chrysler) to build a $4.3 billion EV battery plant in Spain, set to open by the end of 2025.
Innovation in Battery Technology
CATL spends a lot on research, with six R&D centers worldwide. Tim Buckley, founder of Climate Energy Finance, said, “The innovations that we’re seeing from CATL are unbelievable, particularly in the fast charging area.”
Last month, the company launched a new battery that can charge enough for 323 miles (520 km) in just five minutes. This kind of technology is crucial for the future of electric cars.
US Lawmakers Worry About Security Risks
CATL is a major supplier for Tesla’s Shanghai factory, providing lithium iron phosphate batteries. But some US politicians are worried about security risks.
In April, the chair of the House Select Committee on China wrote letters to the CEOs of JPMorgan and Bank of America, asking them to stop working on CATL’s Hong Kong IPO.
Despite these concerns, Buckley believes the US should work with China on clean energy. “They’re rejecting by far the best technology players in the world when it comes to clean tech,” he said.
CATL’s strong IPO shows that investors still believe in its future, even with US-China tensions. The company’s fast-charging batteries and global expansion make it a key player in the EV industry. However, political risks remain as US lawmakers continue to question its ties to China’s government.
For now, CATL is moving forward, proving that the demand for better, faster-charging batteries is only growing.
