CATL, China's largest automotive lithium-ion battery maker, plans to raise RMB 58.2 billion ($9 billion) in a private placement to expand its production capacity, a move that is set to accelerate the advent of the TWh era for electric vehicle batteries.
The company announced on August 12 that it plans to issue up to 233 million additional shares, or 10 percent of its total pre-offering share capital, to no more than 35 specific investors.
Of the RMB 58.2 billion it is raising, RMB 41.9 billion is for a 137 GWh power battery and energy storage battery project, and a 30 GWh energy storage cabinet project.
CITIC Securities said these additional capacities are expected to come on stream gradually over the next 2-3 years, so the company's capacity is expected to reach 200 GWh by the end of the year, 320 GWh by the end of 2022 and over 600 GWh by 2025.
The RMB 7 billion in proceeds will be used for advanced technology R&D and application projects, compared to RMB 2 billion in the previous private placement.
The GaoGong Industry Institute (GGII) previously said that global new energy vehicle penetration will exceed 20% in 2025 and power battery shipments will reach 1,100GWh, moving into the era of TWh.
Global energy storage battery shipments will reach 416GWh in 2025, with a compound annual growth rate of about 72.8% over the next five years, GGII said.
CATL supplies power cells for about 50% of China's vehicle models and works with brands such as Nio, Xpeng Motors, Tesla, BMW, Geely, BAIC, SAIC, FAW, Daimler, and PSA.
In a previous report, China's official media CCTV said that CATL's share price has continued to rise recently, but behind this is a tight supply of battery drought in the new energy vehicle industry.
It is worth noting that CATL currently has plenty of ammunition, and its latest capital raising will further enhance its capital strength.
The company's 2020 revenue is RMB 50.3 billion and its book of monetary funds is as high as RMB 68.4 billion.
As of March 31 this year, CATL's booked monetary capital was further boosted to RMB 71.67 billion.
Shares of CATL rose more than 5 percent in Shenzhen trading after falling more than 4 percent at open.
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