CATL taps investors as world's No 1 EV battery maker raises funds for global supply chain
Contemporary Amperex Technology Ltd (CATL), the world's largest battery producer for electric vehicles (EV), said it is in talks with global investors to raise a fund to finance its plan to build a worldwide supply chain.
The fundraising is in line with CATL's global strategy to promote the use of green energy, said the company, based in the Fujian provincial city of Ningde in eastern China.
"The purpose of the fund is to facilitate global energy transition, with the support of like-minded partners from all over the world," CATL said in a statement to the Post, without divulging the amount it is raising. "The fund [aims] to raise capital mainly overseas, and has been in discussions with a number of potential investors."
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The fund may raise US$1.5 billion from several sovereign wealth funds, the families behind global marques, oil and gas refiners and other manufacturers, the Financial Times reported, citing a person with knowledge of the plans. The fundraising underscores CATL's ambition to expand its worldwide footprint, as global demand for EVs outpaces petrol-gurgling cars that run on internal combustion engines.
Zeng Yuqun, chairman of Contemporary Amperex Technology Limited (CATL), during a panel session on day three of the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, Jan. 18, 2024. Photo: Bloomberg. alt=Zeng Yuqun, chairman of Contemporary Amperex Technology Limited (CATL), during a panel session on day three of the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, Jan. 18, 2024. Photo: Bloomberg.>
One such investor could be Porsche Ventures, the investment unit of the namesake German maker of luxury cars, which launched its first renminbi-denominated fund with China International Capital Corp to invest in Chinese EVs and companies involved in smart mobility.
CATL, with a 37.5 per cent share of the global market for EV batteries, was a pioneer spearheading Chinese EV supply-chain vendors to internationalise their businesses. It supplies batteries to global brands including Tesla, BMW, Ford Motors and Volkswagen.
Chinese companies led by CATL already make up six of the world's top 10 EV battery producers, with a combined 64 per cent of the global market in the first five months of this year.
That dominance of the global market has set off alarm bells in the US, which has ceded the lead in EV roll-outs and infrastructure to China. The White House announced in May it would quadruple tariffs on China-made EVs, which now stand at 100 per cent of their list prices. Last Thursday, additional duties of 17.4 to 37.6 per cent came into effect provisionally in the EU.
Chinese EV companies from BYD, the world's largest electric-car assembler, to start-up Hozon New Energy Automobile, have been actively pursuing localisation of production lines to bypass the curbs.
"Chinese manufacturers that enjoy a production advantage over their global rivals have reasons to step up their worldwide expansion, and they will be able to lure overseas investors amid their internationalisation drive," said Ding Haifeng, a consultant at Shanghai-based financial advisory firm Integrity. "They can sidestep any tariffs after they complete their global supply chain."
CATL announced a €240 million (US$261 million) investment in 2018 to build a battery factory in Germany, the largest market for EVs in the European Union.
During the Auto China Show in late April, CATL unveiled its Shenxing Plus lithium-iron phosphate battery, which it claims has a range of 1,000km. It uses a "granular gradation" technology to deliver a 600-km range after just 10 minutes of ultra-fast charging.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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