HONG KONG — In the latest sign of the growing edge China’s clean energy companies have on their U.S. competitors, the country’s leading electric vehicle battery maker raised $4.6 billion in its Hong Kong trading debut on Tuesday — the largest in the world this year.
Shares of Contemporary Amperex Technology Co. Ltd., or CATL, the largest EV battery maker, traded as much as 18.4% above the listing price of 263 Hong Kong dollars ($33.61), raising at least $4.6 billion. At a ceremony at the stock exchange in central Hong Kong, CATL’s billionaire founder Robin Zeng marked the start of trading by banging a bronze “megagong” reserved for only the biggest listings.
The company, which makes batteries for Tesla and other automakers and has a tech licensing agreement with Ford, controls more than a third of the global market for EV batteries.
“It’s the 800-pound gorilla in the battery space,” said Lei Xing, an independent analyst of the Chinese auto industry based in Amherst, Mass. “You could look at it as the Tesla of batteries.”
International investors clamored for CATL stock despite U.S.-China tensions that have effectively kept it and other Chinese EV and battery makers — and their world-leading technology — out of the U.S., the second-largest passenger vehicle market in the world after China. U.S. investors were restricted from buying stock unless they had offshore accounts.
Zeng was joined by officials representing the coastal city of Ningde in China’s Fujian province, where CATL is based.
“The Hong Kong listing means that we are more deeply integrated into the global capital market, and it marks a new starting point in promoting the global zero-carbon economy,” he said.
The listing is also a boost for the Chinese territory of Hong Kong, an international financial hub where the market has been sluggish in recent years.
One reason Chinese companies are choosing to list in Hong Kong is to mitigate geopolitical risk, Xing said, as it’s “closer to home, safer.”
In the U.S., CATL is among dozens of companies the Pentagon blacklisted in the final days of the Biden administration over alleged ties to the Chinese military, which CATL denies. The House select committee on the Chinese Communist Party cited that blacklisting last month in letters to Bank of America and JPMorgan Chase urging them to withdraw from the deal — both banks remained involved.
Ford has faced questions from lawmakers over an agreement to license technology from CATL to produce battery cells at a $3.5 billion battery plant in Michigan.
Chinese EV and battery makers also face a 100% U.S. tariff on EVs and a 25% tariff on lithium-ion EV batteries introduced by the Biden administration, as well as the steep tariffs on all Chinese imports imposed by President Donald Trump, with both presidents citing unfair trade practices by Beijing. CATL says the impact of tariffs is minimal given its limited business in the U.S.
Experts say the trade barriers could slow the development of American EVs, whose high prices have discouraged consumers from buying.
It would take “at least a decade” for the U.S. to develop its own version of CATL, Xing said.
The company, which was founded in 2011 and is already listed in the mainland Chinese city of Shenzhen, made $50 billion in revenue last year, about 70% of it in China. It faces intense competition, however, from Chinese rivals such as BYD — reporting an almost 10% decrease in revenue last year, the first such drop since CATL began releasing operating figures in 2015.
CATL says it will use almost all of the funds raised in Hong Kong to build a a $7.3 billion factory in Hungary, allowing it to make batteries in Europe for automakers such as BMW, Stellantis and Volkswagen.
“They know that in order to continue to grow the way they want to, they really need to establish a presence outside of China,” said Tu Le, the Detroit-based founder and managing director of Sino Auto Insights. “And the four-and-a-half-billion-dollar IPO is effectively building a war chest for them to do that.”
The “irony,” Le said, is that “it could be the CATLs and the BYDs that provide the jobs for Americans moving forward, because they’re really leading the way.”
CATL said last month that its new battery cell could give a car more than 300 miles of driving range with just five minutes of charging.
“At the end of the day, the only way to make more affordable electric vehicles is to lower the battery pack price,” Le said. “And the only game in town currently able to do that are Chinese players.”
