Going to Hong Kong for IPO: The Two Sides of CATL
In the history of technology and business, Bill Gates' warning that "Microsoft is always just 18 months away from bankruptcy" has long become a classic footnote for corporate crisis awareness.
It is this sense of crisis ingrained in the corporate gene that has propelled Microsoft from a monopolistic global hegemon in the PC era to a leader in the cloud - computing era. The sense of crisis is the underlying reason why this business empire continues to innovate and has not declined due to the changes of the times and technologies.
On the other side of the globe, Contemporary Amperex Technology Co., Limited (CATL), a Chinese new - energy technology giant, is also practicing the same crisis philosophy.
In 2017, when this Chinese new - energy battery manufacturer's global market share first surpassed that of Panasonic and BYD to top the list, Chairman Zeng Yuqun issued an alarm titled "Will Pigs Really Fly When the Typhoon Comes?" to all employees.
"While we are lying on the warm bed of policies and taking a nap, our competitors are working desperately at the critical moment of life and death. The gap between progress and regression is imaginable."
This sense of crisis is the fundamental reason why CATL has ranked first in the global power battery installation volume for eight consecutive years. The sense of crisis urges CATL to continuously innovate. Even after securing the leading position, the company continues to make substantial investments in product R & D and manufacturing technology, innovating products, upgrading production lines, improving yields, and expanding scale.
In the battery industry, CATL is almost invincible. Its A - side is obviously a new - energy battery producer, and it has achieved the best in this field.
Therefore, the company is seeking a broader market. Just as Microsoft transformed from a software provider to a cloud service provider, CATL is also redefining its role.
On May 20th, CATL officially listed on the Hong Kong Stock Exchange, which marks the beginning of its departure from the identity of a battery manufacturer and the display of its B - side.
Innovation, the Key to CATL's Success
One out of every three vehicles in the world is equipped with CATL's batteries. Since becoming the number one in global power battery installation volume in 2017, CATL has firmly held nearly 40% of the global market share. No matter how many times the second - place position has changed hands, CATL's leading position has remained stable.
The fundamental reason for achieving this is that CATL has always been doing one thing: innovation. Zeng Yuqun has emphasized on multiple occasions that "innovation is CATL's core competitiveness."
The prospectus shows that in the ten - year period from 2015 to 2024, CATL's cumulative R & D investment reached 71.8 billion yuan. Especially in 2023 and 2024, CATL invested nearly 37 billion yuan in these two years, which is even higher than the funds raised in this Hong Kong listing.
As the global leader in power batteries, CATL has taken the lead in many cutting - edge explorations. Whether it is leading the process transformation to improve the cell yield or collaborating with equipment enterprises to solve manufacturing problems, only CATL has the financial strength, technical strength, and scale strength to address these issues.
It is also written in CATL's prospectus that the company has the world's largest battery production capacity of 676 GWh, the only three lighthouse factories in the lithium - battery industry globally, and a cell monomer failure rate at the DPPB level (one in a billion).
After CATL takes the lead in innovation, these production processes gradually spread from the industrial chain to various battery companies. It can be said that CATL is groping for a way forward, and other battery companies are following in CATL's footsteps.
Of course, as the leader of the industrial chain, CATL's innovation ability has also extended from manufacturing processes to battery material systems and battery products.
The Qilin battery and the Shenxing battery are the best examples. The former's innovation in battery structure enables the realization of various battery performance concepts such as ultra - fast charging and ultra - long range in mass - produced products, while the latter allows the lithium iron phosphate material to break through the inherent perception and achieve high rates of 4C, 6C, and even 12C.
The recently released Xiaoyao dual - core battery and sodium - ion battery are further manifestations of CATL's innovation in battery structure and battery materials.
The dual - core battery enables battery pack products to be truly customized and personalized while ensuring the standardization and scale of cell manufacturing. The technological breakthrough of the sodium - ion battery allows China's new - energy industry to be unrestricted by lithium resources and enables new - energy vehicles to penetrate into a wider range of regions without being restricted by low - temperature environments.
Innovation always involves risks, and not all bets can be successful. However, what is most surprising about CATL is that since its establishment, every choice of technological direction has been in line with user needs and industry trends.
From betting on the ternary route in the early days to developing the Shenxing battery in recent years and shifting to lithium iron phosphate on a large scale, CATL has made forward - looking predictions and layouts before the market trend changes.
There has always been an example circulating in the market: In 2019, in order to solve the mileage anxiety of electric vehicles, automobile manufacturers split into two technological routes. One wanted to increase energy density to create ultra - long - range batteries to solve the mileage problem with one charge, while the other chose to improve rate performance to create ultra - fast - charging batteries to achieve the same charging speed as refueling.
After research, CATL chose to focus on the R & D of ultra - fast - charging batteries. Today, the popularization of ultra - fast charging has also proven the accuracy of this leading company's strategic vision.
Since its establishment in 2011, CATL has transformed an unknown small city in Fujian into the global capital of new energy. Many people may not know where the city of Ningde is located, but they all know the company CATL.
That is to say, in the past 14 years, CATL has spread the name "Ningde" globally through its power battery business. In the next 14 years, CATL will focus on the word "Era".
CATL's innovation has also shifted from battery products to business models. Such innovation is no longer just a bet on product technology routes but an investment in an emerging industry.
Innovation is driving CATL from its A - side to its B - side, that is, from the new - energy battery market to the zero - carbon market.
"Zero - carbon" does not mean zero carbon dioxide emissions. Instead, it means calculating greenhouse gas (mainly carbon dioxide) emissions, designing plans to offset the "carbon footprint" and reduce carbon emissions to achieve "zero - carbon", that is, zero carbon emissions.
For any Chinese manufacturing enterprise to go global, zero - carbon is the key. Whether it is Europe or the United States, the requirements for carbon emissions are much higher than those in China. CATL has made many explorations. For example, in Germany, CATL spent several years and invested tens of billions to build the Thuringia factory, paving the way for China's power battery industry to go global.
Next, CATL's strategic focus will also be on zero - carbon. As Zeng Yuqun mentioned in the Hong Kong IPO speech, CATL is not only a battery component manufacturer but also a provider of system solutions and is committed to becoming a zero - carbon technology company.
With the global market and zero - carbon business, CATL can do much more than just new - energy batteries.
Zero - Carbon, the Rebirth of CATL
"Transformation and upgrading" is the most talked - about term in China's manufacturing industry at present. Whether it is the home appliance, mobile phone, automobile, or even clothing and food industries, all are trying their best to speed up the process of "transformation and upgrading".
High - end, intelligent, and green are the three key points of "transformation and upgrading". Among them, greening is the most difficult. Because this involves not only the transformation and upgrading of a single factory but also the reshaping and innovation of the entire industrial chain centered around products.
Greening is difficult but must be done. CATL's zero - carbon business revolves around greening.
CATL started with itself. In 2023, this battery leader announced its zero - carbon goals: carbon neutrality in core operations by 2025 and carbon neutrality across the entire value chain by 2035. This also means that by 2035, all batteries produced by CATL will be zero - carbon batteries, achieving carbon neutrality across the entire value chain from mineral resources to batteries.
While achieving the zero - carbon goals for its battery business, CATL's zero - carbon work has also extended to more fields. CATL hopes to build a zero - carbon ecosystem covering the entire chain of energy production, storage, and consumption. Centered around battery technology, it extends to fields such as energy storage, battery swapping, and energy management, and then integrates fragmented demands through carriers such as zero - carbon industrial parks and zero - carbon transportation networks to build multiple zero - carbon scenarios.
For example, CATL's recent cooperation with Fangda Group and Nanjing Iron and Steel Group are all in - depth cooperation at the uppermost reaches of the manufacturing industry, covering the entire industrial chain from material preparation to auto parts and then to C - end products.
Another more prominent example is Moutai.
On April 18th this year, Moutai and CATL officially signed a strategic cooperation agreement. The two sides will jointly promote the development of zero - carbon factories and green logistics. Simply put, CATL will help Moutai transform its liquor - producing factories into zero - carbon factories.
Why does Moutai want to build zero - carbon factories? It starts from the national strategic level.
China aims to achieve "carbon peak" before 2030 and "carbon neutrality" before 2060. This is a clear goal in China's "14th Five - Year Plan" outline. As a typical traditional industry with high energy consumption and high carbon emissions, the liquor industry faces great pressure for transformation. It is difficult to achieve the transformation task overnight by itself, so finding a partner has become the optimal solution.
As the global leader in batteries, CATL has made a lot of efforts in carbon reduction. For example, in the MSCI ESG rating that Moutai values highly, CATL has reached the AA level.
Looking at a set of data, as of the end of 2024, the proportion of zero - carbon electricity in CATL's core operations has increased to 74.51%. It already has 9 "zero - carbon factories", and the greenhouse gas emission intensity per unit product has decreased by 20.97%. Moreover, Zeng Yuqun has also clearly stated that "all battery factories will be built into zero - carbon factories" this year.
This undoubtedly provides a reference sample for Moutai and also offers a very valuable reference sample for a broader range of manufacturing industries outside China's new - energy industry.
Even a consumer leader like Moutai needs to undergo zero - carbon transformation. Every sub - industry and every link in China's manufacturing industry needs to make changes under the goals of "carbon peak and carbon neutrality". This is an inevitable choice for China's manufacturing industry to move from high - speed development to high - quality development and a necessary path to go global.
CATL's zero - carbon business is also straightforward, that is, to export technical experience externally, promote the new - energy transformation of traditional industries such as steel, cement, and chemicals, and at the same time explore integrated zero - carbon solutions.
Zeng Yuqun also said: "We are also exploring integrated zero - carbon solutions, cooperating with multiple parties to build zero - carbon islands, jointly building zero - carbon industrial parks, and creating zero - carbon demonstration cities across the region."
These explorations are not one - sided efforts by CATL, but the cooperation parties have urgent needs. Zero - carbon is no longer just an industry trend but also a new infrastructure task.
According to incomplete statistics, at least 21 provinces and municipalities have included zero - carbon factories in their relevant carbon - peak implementation plans, including Shanghai, Jiangsu, Zhejiang, Shandong, Henan, Hunan, etc.
The demand for zero - carbon is not limited to China. Currently, 195 countries and regions around the world have announced their national independent contribution targets for carbon reduction, and countries are accelerating the transformation of their energy structures. The International Energy Agency predicts that starting from 2030, to achieve "net - zero emissions", global investment will reach 4.5 trillion US dollars annually.
However, how to ultimately achieve a unified zero - carbon goal for the diverse demands of various industries, countries, and regions requires someone to constantly explore.
When China's manufacturing industry was in its infancy in the last century, it could still learn from the mature models of Europe, America, Japan, and South Korea. Now, the zero - carbon path is a process from scratch in the global market, and CATL is at the forefront, moving forward step by step.
This is a very difficult process that requires a large amount of manpower and material resources. It is also a process for CATL to reshape itself and "re - create the King of Batteries" in the zero - carbon market on its B - side.
Conclusion
From Microsoft to CATL, great enterprises in business history are all verifying the same survival rule: the real moat does not lie in the current market share but in the ability to transform the sense of crisis into continuous evolution.
If in 2018 when listing on the A - share market, CATL needed to raise more funds to invest in R & D and expand production capacity to ensure its leading position in the global battery market, then in 2025, listing on the Hong Kong Stock Exchange marks the beginning of CATL's self - reinvention and its journey to become a global zero - carbon technology company.
In this Hong Kong listing, CATL's issue price was HK$263 per share, and the net funds raised were approximately HK$35.3 billion (equivalent to approximately 32.5 billion yuan), making it the largest listing fundraising globally this year. However, this figure is obviously insignificant compared with its more than 280 billion yuan in cash and cash equivalents.
However, the shareholder structure is more important. Sovereign wealth funds from the Middle East, Europe, and some Southeast Asian regions, as well as multinational automobile manufacturers, account for two - thirds of the shares. This capital layout is like a "global market map", laying a key foundation for its overseas business expansion.
To expand the overseas market, CATL not only wants to go global on its own but also lead China's manufacturing industry to go global. CATL has proven in eight years that it did not achieve success by relying on policies but has absolute technological and manufacturing strength.
In the next stage, CATL's focus is no longer on the market share of power batteries or energy - storage batteries but on the new business model in the zero - carbon market.
CATL's story has officially opened a new chapter. It is no longer just the "Ningde" that makes batteries but the "Era" that leads the manufacturing industry towards zero - carbon.