Shares of Contemporary Amperex Technology Ltd. (CATL) saw nearly 8% drop on Tuesday in the Hong Kong market after the Chinese battery maker disclosed a HK$39.2 billion (about $5 billion) equity offering.

The company intends to raise the funds via a private placement in response to the company’s desire to amplify its investment in renewable energy amid a global oil shortage. CATL, a supplier to Tesla (NASDAQ:TSLA), BMW, Volkswagen, Xiaomi and Nio, priced 62.4 million new H shares at HK$628.20 each, at the low end of its range, according to regulatory filings.

The funds will be allocated to global new-energy projects, research and development, and general corporate needs. CATL stated that the capital raised will fuel its international expansion, boost production capacity, and advance its zero-carbon strategy.

The company also highlighted that the demand for power and energy storage batteries remains robust as the global shift towards electrification accelerates. The funds raised will enable CATL to maintain its leadership position in this rapidly expanding sector.

Winston Ma, executive director of the Global Public Investment Funds Forum, told Nikkei Asia that the $5 billion deal is significant, noting that even CATL is “not immune” to “geopolitical repricing” despite its strong market position.

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CATL Rides EV Boom With Strong Growth

CATL, based in China, controls approximately 37% of the global EV battery market, making it the most crucial supplier in the industry. It went public in Hong Kong last May, raising over $5 billion mainly for overseas projects like a Hungarian plant

The company reported strong first-quarter results, with net profit rising about 49% year over year to 20.7 billion yuan ($3.03 billion). HSBC expects this momentum to continue into the second quarter, supported by high production utilization and ongoing capacity expansion, which are driving market-share gains, CNBC reported.

The bank also highlighted favorable macro trends, noting that volatile oil prices and growing AI data center demand are accelerating electrification and boosting the outlook for EVs and battery storage solutions.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.

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