Battery fever grips China

lithium china

The world’s largest Lithium-Ion battery maker Contemporary Amperex Technology Co (CATL) has had a dramatic IPO listing on the Chinese stock market (ChiNext) jumping a whopping 76% in just 4days after raising $1Bn of expansion funds.

It seems the Chinese public can’t get enough of Lithium-Ion battery makers as the IPO, backed by Goldman Sachs, was 3,201 times oversubscribed by retail investors.

CATL’s IPO produced three new Chinese billionaires within 48 hours. They are CATL’s founder Zeng Yuqun (26% stake), vice chairman Huang Shilin (12%), and shareholder Pei Zhenhua (6.1%).

CATL has a leading share of the Chinese electric vehicle market, holding agreements with automakers SAIC Motor Corp.; electric bus giant Yutong; and Geely, which owns the Volvo and Lotus brands. The Chinese battery maker also has supply agreements with BMW, Honda, Hyundai, Nissan, Toyota and Volkswagen, and Daimler.

CATL, which now has an estimated 12 gigawatt-hours a year of battery manufacturing capacity, hopes to increase annual production to 50GWh by 2020.

The capacity will come through a 24-line factory in Huxi, China, which will be the world’s biggest battery manufacturing center after Tesla’s Gigafactory.

CATL is an industry leader at home, yet its market share overseas is comparatively thin. Therefore, it’s aggressively seeking global expansion for both Lithium supply and technology solutions.

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