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China’s biggest battery producer could become world’s biggest after raising $2 billion in an IPO

Contemporary Amperex Technology (CATL), China’s largest automotive battery maker, has been making strides in the past few years thanks to the country’s rapid deployment of electric vehicles.

The company is now reportedly aiming to become the world’s largest automotive battery maker with a new factory financed by an initial public offering (IPO) valued at $2 billion.

The IPO was reported by Bloomberg last week. Goldman Sachs is reportedly helping the company raise 13.1 billion yuan ($2 billion) for a 10 percent stake, which would value the company at $20 billion.

They plan to use the money to finance their second battery factory next to their headquarters in Ningde, Fujian Province.

Tesla has been calling its battery factory a “gigafactory” because it will have an annual production capacity of several gigawatt-hours (GWh) of energy storage.

CATL’s new factory could also be considered a “gigafactory” since they plan to produce 24 GWh of batteries at the factory by 2020, which would add to their current 17.5 GWh of capacity and make them the biggest li-ion battery producers in the world, according to Bloomberg:

CATL’s batteries, which are primarily using LiFePo and NCM chemistries in prismatic cell formats, have been mostly going to electric bus production and plug-in hybrids, but they recently signed a supply contract with SAAB successor National Electric Vehicle Sweden (NEVS) in order to enable the production of hundreds of thousands of all-electric cars per year.

Apple has also been rumored to be in talks with CATL.

The IPO is reportedly going to close by the end of the year at which point should have a better idea of the company’s plans.

Electrek’s Take

CATL has been on our radar for a while now and it will be interesting to see how their IPO turns out since it’s going to have a major impact on the global battery industry – especially in China.

With this said, I’m not sure I understand Bloomberg’s analysis of the planned production capacity.

They are comparing CATL’s 2020 planned capacity to Tesla’s 2018 planned capacity, which is 35 GWh of lithium-ion battery cells annually. That’s with about 30% of the factory being completed. Tesla said that it plans to produce 105 GWh of lithium-ion battery cells and 150 GWh of battery pack capacity at full capacity, which is expected in 2020.

While that’s only a goal, it’s also the case for CATL. So if they are comparing planned production, I think that’s a more appropriate comparison.

Either way, I think if you have the ambition to become the world’s biggest battery producer by 2020 in order to support the auto industry’s electric transition, that’s what you should be aiming for.

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