Tesla Supplier CATL Plans To Raise $2.85B To Expand Electric Battery Business

Contemporary Amperex Technology Ltd. (CATL), a Chinese battery maker, says it wants to raise 20 billion yuan or $2.85 billion to fund battery projects and increase working capital.

What Happened

CATL plans to raise funds to expand its battery manufacturing infrastructure in Jiangsu, Sichuan, and Fujian, according to a filing it made to the Shenzhen Stock Exchange on Wednesday.

In another filing on the same day, the company said it plans to invest 10 billion yuan in Ningde in Fujian province to make batteries. 

Why It Matters

CATL has already signed a 2-year contract with Tesla Inc. TSLA to manufacture batteries for its electric vehicles. 

The company has partnerships with other major auto manufacturers such as Daimler AG DDAIF, Bayerische Motoren Werke AG BAMXF, and Volkswagen Group VLKAF. 

A 50% drop in electric vehicle sales is expected in China in February due to the ongoing Covid-19 epidemic.

Price Action

CATL shares traded 2.21% lower at $21.31 at press time in Shenzhen on Thursday.