SHANGHAI -- Chinese authorities on Wednesday approved CATL's stock market listing, enabling the lithium-ion battery maker to finance a new factory that will expand its already vast capacity.
CATL, which faces competition in the global market from Tesla partner Panasonic, will raise 13.1 billion yuan ($2.07 billion) through its initial public offering in Shenzhen, of which 8.9 billion yuan will go to build a 24 gigawatt-hour production complex.
This, plus an expansion of existing facilities, will bring the company's total production capacity to 50GWh a year by 2020. The other 4.2 billion yuan in proceeds will go toward research and development.
China produced 44.5GWh of electric-vehicle batteries last year, according to Shenzhen Gaogong Industry Research, or GGII. CATL -- which stands for Contemporary Amperex Technology Co. Ltd -- sold 11.84GWh worth of batteries, giving it a nearly 30% market share.
While market share figures are inconsistent across research firms, this tally puts CATL ahead of onetime Chinese market leader BYD, and on par with Japan's Panasonic. CATL has a partnership with German automaker BMW, which is one of the ways the Ningde-based company is expanding its sales channels.
China has promoted the use of electric cars and other "new-energy vehicles" with buyer subsidies and other policies. Sales of new-energy vehicles jumped to 777,000 units last year from 75,000 in 2014. This soaring demand has fueled CATL's rapid growth.
GGII predicts that Chinese output of electric-vehicle batteries will climb to 146GWh in 2020, then to 215GWh in 2022.
But China is beginning to tighten standards for new-energy vehicle subsidies. If the growth in vehicle demand fades, CATL may become overextended in capacity.
Last year, CATL's sales increased 34% to 19.9 billion yuan, while net profit rose 31% to 3.9 billion yuan. CATL boasts a high profit margin, but the company also received more than 1 billion yuan in government subsidies over the past three years.