Shares of CATL, the world’s leading electric vehicle battery maker, surged more than 16% on Tuesday following its debut on the Hong Kong stock market. The company raised approximately $4.6 billion in what is the largest initial public offering (IPO) of the year globally.
CATL, or Contemporary Amperex Technology Co., attracted significant interest from international investors, despite ongoing trade tensions between China and the U.S. The company sold over 135 million shares at the highest offer price of 263 Hong Kong dollars ($33.60) each. When trading began, the stock rose to 296 Hong Kong dollars ($37.80), 12.5% higher than the offer price, and ultimately closed up 16.4%.
In addition to its Hong Kong listing, CATL’s shares are also traded in Shenzhen, where they initially fell but later increased by 1.2%. As a supplier to major automakers such as Tesla, Volkswagen, BMW, Mercedes-Benz, Ford, Toyota, and Honda, CATL holds a 38% global market share for EV batteries in 2024, according to its IPO documentation.
CATL has faced scrutiny in the U.S. Earlier this year, the U.S. Defense Department added it to a list of companies with alleged ties to China’s military, a claim that CATL has denied, calling it a mistake. In April, U.S. politicians also urged JPMorgan Chase and Bank of America to withdraw from CATL’s IPO, but both banks remained involved. Ford Motor Co. is licensing CATL technology to build batteries, though some Republican lawmakers have expressed concerns about the company benefiting from U.S. taxpayer dollars.
Although U.S. investors were excluded from CATL’s offering, many large U.S. institutional investors participated via offshore accounts. The company intends to use most of the proceeds to build a new factory in Hungary to be closer to its key European customers.
The IPO was celebrated with a gong-striking ceremony in Hong Kong’s bustling Central district, attended by government officials, including the city’s Financial Secretary, Paul Chan. CATL’s chairman, Robin Zeng, emphasized the company’s commitment to zero-carbon technology and expanding its global presence in capital markets.
Zeng, who trained as a physicist, co-founded the company in 2011. CATL’s roots trace back to his earlier work with Amperex Technology, a company that he helped manage until its acquisition in 2005. Under his leadership, CATL has become the global leader in EV batteries, with its products now powering over 17 million electric vehicles worldwide, or about one in every three EVs.
Experts suggest that the success of CATL’s IPO could inspire more large-scale listings in Hong Kong, which has seen an increase in IPO activity following a sluggish 2023. CATL’s strong performance underscores its role in the rapidly growing electric vehicle sector and its continued expansion globally.
