CATL's full-year power battery installation in China in 2021 was 80.51 GWh, capturing 52.1 percent of the market.

Chinese power battery giant Contemporary Amperex Technology Co Ltd (CATL)'s plan to raise huge amounts of money from specific targets has come under a lot of scrutiny, and the company is once again defending itself against it.

The Shenzhen-listed company said in a response to questions from the Shenzhen Stock Exchange that it will have a capacity gap of no less than 430 GWh in 2025, based on future capacity demand and its current capacity profile, according to an announcement made today.

For reference, CATL's power battery installation in China for the full year 2021 was 80.51 GWh, accounting for a 52.1 percent market share, according to data released last week by the China Automotive Battery Innovation Alliance.

CATL says it will face capacity shortfall of at least 430 GWh by 2025-CnEVPost

(Graphic by CnEVPost)

In August 2021, CATL (SHE: 300750) announced a new round of private placement, with plans to raise up to RMB 58.2 billion in total by issuing shares to no more than 35 specific targets.

This quickly brought the company into question for over-financing, as it still had RMB 80.7 billion on its books as of the end of September 2020.

On November 15, 2021, CATL announced that it would reduce its planned fundraising to RMB 45 billion to mitigate such questions.

Last week, the Shenzhen Stock Exchange approved CATL's plan and the additional shares could be registered after it received the consent of the China Securities Regulatory Commission.

However, the Shenzhen Stock Exchange offered CATL several questions, including the risk of whether the capacity could be absorbed, and asked the company to respond.

CATL said in today's announcement that it has a lithium-ion battery capacity of 106.41 GWh from January to September 2021, and that the new production line currently in operation will have a design capacity of 220 GWh to 240 GW per year after stable operation.

Looking at future capacity demand and the company's existing capacity, the company has a capacity gap of no less than 430 GWh in 2025, it said.

"The company's capital raise will be used to add lithium-ion battery capacity of approximately 135 GWh per year, which is consistent with business development needs," it said.

Even after that 135 GWh capacity goes into production, the company still has a capacity gap of 295 GWh, CATL said.

At a cautious RMB300 million/GWh estimate, the company would still need about RMB 88.5 billion in future investment, the announcement said.

CATL said over the weekend that it will hold a launch event to unveil its battery swap brand called EVOGO.

The launch will take place on Tuesday, January 18 at 3:30 p.m. Beijing time, according to the company, which did not disclose any more information.

As of press time, CATL's shares traded in Shenzhen rose 2.7 percent to RMB 593.01, with a total market capitalization of RMB 1.38 trillion.

CATL says it will face capacity shortfall of at least 430 GWh by 2025-CnEVPost

CnEVPost Daily Newsletter