China Market Insider CATL Plans Mega IPO in Hong Kong

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CATL plans a mega IPO in Hong Kong to secure foreign currency for its expansion in Europe and global markets.

CATL aims to defend its global market leadership with a mega IPO in Hong Kong, targeting up to $5 billion through a secondary listing. According to its prospectus, the funds will primarily support expansion in Europe and other international markets.

Back in 2022, the battery manufacturer secured $6.7 billion in capital through an IPO in mainland China. This time, CATL has opted for the Hong Kong Stock Exchange, where so-called A-to-H listings are possible. This allows the company to offer its mainland China "A-shares" as "H-shares" in Hong Kong, granting direct access to foreign currency.

Capital for Factories in Hungary and Spain

CATL urgently needs US dollars and euros, particularly for the construction of new factories in Hungary and Spain. Converting Chinese yuan (renminbi) into these currencies comes with exchange rate risks and bureaucratic hurdles in China. In Hong Kong, however, CATL can obtain foreign currency directly without the need for complex conversions.

CATL is just one of many Chinese companies driving a surge in A-to-H listings in Hong Kong. According to a report by Bloomberg, CATL supplier Lead Intelligent, based in Wuxi and specializing in manufacturing equipment for EV battery production, is also planning a Hong Kong IPO. The offering is estimated to be worth around $500 million.

Strengthening Global Production and Capital Structure

Just like CATL, its suppliers also benefit from manufacturing directly in Europe and other foreign markets. Raising foreign currency reserves through a Hong Kong IPO helps establish the necessary capital structure for this expansion.

Securing Global Market Leadership

CATL’s planned $5 billion IPO is exceptionally large, even by Hong Kong standards. Analysts believe this move will help the Chinese battery giant solidify its position as the world's leading battery manufacturer. 

“The majority of CATL’s funds are held in Chinese yuan,” the South China Morning Post quotes a financial expert from Shanghai. “Raising capital in Hong Kong will effectively support its ambition to become the undisputed champion of the global EV battery market.”

Leadership Under Pressure

CATL’s dominant market position has recently come under significant pressure—from both domestic and international rivals. While the company maintained its status as the world’s leading high-voltage battery supplier for the eighth consecutive year in 2024, holding an impressive 38% market share (+1.3% year-over-year), much of this success stemmed from sales in China, where market growth has slowed.Beyond China, CATL faces stiff competition. In 2024, it held a narrow global market lead outside of China, with a 26.4% share—just barely ahead of Korea’s LG Energy Solution at 25.9%.

Threats from the U.S. and Europe

Korean competitors are closing in, but CATL also faces mounting geopolitical challenges. Since Donald Trump’s second term began, global tensions and rising protectionism—particularly from the European Union—have posed real threats. The European Commission has imposed additional tariffs on Chinese EVs, and the U.S. has gone even further, extending tariffs to all Chinese-made batteries, not just those used in electric vehicles.

To maintain its success amid rising global trade barriers, CATL must invest in battery factories across Europe, Indonesia, and other regions. Avoiding import tariffs and securing massive capital reserves are both crucial for this strategy.
 According to CATL’s Hong Kong IPO prospectus, the company has already invested $700 million in its battery plant under construction in Hungary. The total cost is expected to reach $7.5 billion, with a significant portion of the funding coming from the secondary listing in Hong Kong.

Declining Market Share in China

While CATL remains the undisputed market leader in China, its domestic market share has dropped from a peak of 52% to 45%. More and more automakers are investing in their own battery production or forming joint ventures with smaller battery suppliers.

CATL has secured its market dominance through innovative products, earning widespread recognition and acclaim. However, its success also creates concerns among industry players who fear becoming too reliant on a single giant. This sentiment has fueled the rapid rise of Chinese competitors like Fudi Battery and CALB.

Smaller Manufacturers Gaining Ground

This competition is not limited to China—smaller manufacturers are increasingly challenging CATL on the global stage. According to Sina Caijing, the installed capacity of CALB batteries outside China grew by more than 300% from January to October 2024, while BYD saw an increase of over 140%.
 To be fair, CALB’s growth started from a smaller base compared to CATL. However, the message is clear: CATL cannot afford to rest on its achievements. “CATL is under attack from both Chinese and international competitors,” Sina Caijing reports.