Contemporary Amperex Technology Co. Ltd (CATL), the largest global producer of electric-vehicle batteries, soared by 44% to reach a valuation of around $12.3 billion on its first trading day in China. As per Chinese rules, the maximum rise permitted in a stock debut is 44%. CATL, whose customers include Volkswagen, Hyundai, and BMW, is the only Chinese firm capable of giving strong competition to Samsung and LG.
CATL, which has now become the largest company on the ChiNext list, intends to use most of its IPO proceeds to build a factory which will help it achieve the capacity to produce 50GWh a year by 2020. CATL reported a 31% increase in profits last year helped by an increase in demand. The demand for batteries is expected to increase significantly in China aided by ample subsidies for alternative-energy vehicles as well as regional restrictions on gas vehicles.
China is the biggest market for electric vehicles worldwide with a growth in electric car sales of 72% last year. CATL also has plans to enter Europe through the establishment of a factory in Germany.
CATL has now become the largest company on the ChiNext list
Closer home, in the U.S., CATL’s rival Tesla has some grand plans. Tesla CEO Elon Musk said there are plans to use SpaceX technology to make the electric Tesla Roadster a supercar. Tesla is looking to add ten rocket thrusters around the car to improve speed, braking and cornering so much so that the Roadster would be capable of flying on the road.
Tesla is also coming up with new software updates which will include full self-driving features for Autopilot 2.0 vehicles. Meanwhile, Tesla’s Model Y is expected to be more popular than Model 3, and is expected to be priced between the ranges of the Model 3 and Model S.
As the world progresses more towards electric vehicles and self-driving cars, it will be interesting to watch how companies innovate and what strategies they adopt to stay ahead in the game and even win it.