AsianFin — CATL has taken a significant step toward listing on the Hong Kong Stock Exchange, marking a pivotal move in its global strategy.

In a filing on Monday, the Chinese battery giant updated its IPO prospectus, setting a maximum price of HK$263 (USD 33.66) per H-share. The offering includes 118 million shares and aims to raise between USD 4 billion and USD 5 billion.

At first glance, CATL appears financially strong, with 260 billion yuan (USD 35.9 billion) in cash and daily profits of 140 million yuan (USD 19.3 million). But its prospectus tells a different story: its foreign currency reserves of €3.8 billion (USD 4.1 billion) fall far short of the €10 billion (USD 10.8 billion) required for its Hungary gigafactory project alone.

CATL's Hong Kong IPO is not merely about replenishing capital. It's a calculated move to raise euros and dollars directly—fuels it needs to scale its European operations. The offering comes as part of a broader strategy to convert capital into market access, bypass trade barriers, and lock in cornerstone investors like Sinopec and Kuwait's sovereign wealth fund. These moves knit oil capital into the lithium battery value chain, allowing CATL to reshape its global valuation through international markets.

As trade restrictions tighten across the U.S. and EU, and as global technology rivalries deepen, CATL's ambitions stretch beyond scale. It's positioning the Hong Kong listing as a geopolitical springboard to influence the rules of global energy distribution.

CATL dominates the global EV battery market, holding a commanding 38.3% share as of Q1 2025, according to SNE Research—more than the combined total of the next five players.

Though the company saw its 2024 revenue dip 9.7% to RMB 362 billion (USD 50 billion) amid industry-wide price wars, net profit surged 15% to RMB 50.75 billion (USD 7 billion). In Q1 2025, that momentum accelerated, with net profit jumping 32.85% and gross margins hitting 24.4%.

CATL's energy storage business is emerging as a powerful second engine. In 2024, it generated RMB 57.3 billion (USD 7.9 billion) in revenue, up 34.3% year-on-year, overtaking the EV battery segment in profitability. Energy storage gross margins reached 26.84%, beating EV batteries for the first time. Overseas margins were even higher at 29.5%, underlining CATL's global pricing power.

International revenues now account for over 30% of CATL's total, and the company is aggressively building out capacity across 13 global bases in countries including Germany and Hungary. But local production mandates—driven by the U.S. Inflation Reduction Act and the EU's Battery Regulation—are forcing CATL to invest heavily overseas just to stay in the game.

In 2024 alone, the company's disclosed investment needs in Europe exceeded €10 billion (USD 10.8 billion). Yet as of mid-2024, its foreign currency reserves stood at just €3.86 billion (USD 4.17 billion) and $6.74 billion—barely enough to cover existing commitments. The Hong Kong listing is CATL's fast lane to FX.

The IPO has drawn over 20 cornerstone investors, a who's who of global energy and finance. Commitments total up to HK$203.71 billion (USD 26.1 billion), or 65.7% of the total raise, based on the top-end pricing.

Sinopec's $500 million stake exemplifies the strategic depth of these partnerships. In April, it signed a battery-swapping deal with CATL targeting 500 stations this year and 10,000 in the long run. This aligns its nationwide network of gas stations with CATL's swappable battery tech—redefining the energy infrastructure for EVs.

Kuwait's KIA has also committed $500 million, signaling that sovereign capital is betting heavily on CATL's vision of global energy leadership. Their investments suggest that lithium battery technology could succeed oil as the dominant energy driver of the next century.

Despite a sluggish European EV market, these institutional backers are betting on CATL's long-term ability to breach trade walls and cement geopolitical influence through energy dominance. With its Hungary plant ramping up to 100 GWh, those bets may soon pay off.

CATL's domestic valuation—1.1 trillion yuan (USD 151.8 billion)—lags global peers. LG Energy Solution, with only one-third the shipment volume, commands a market cap that's already 36% of CATL's. The Hong Kong listing could act as a valuation reset, helping CATL narrow this gap through international pricing mechanisms.

The Hong Kong IPO is just one piece of CATL's broader globalization strategy, which blends capital, technology, and policy alignment.

Facing U.S. sanctions and European regulatory hurdles, CATL has shifted from passive adaptation to proactive restructuring. First, it's leveraging its IPO proceeds—90% of which are earmarked for Hungary—to localize production and flip trade restrictions into cost advantages. Second, it's exporting its IP via licensing models, creating light-asset revenue streams and locking in client dependency. Third, it's integrating vertically, from raw material sourcing in Indonesia to downstream infrastructure through battery-swapping stations in China.

The goal is to move from scale to system—building not just batteries, but the architecture of a future energy network.

CATL's evolution is about more than dominance in battery shipments. Investors are watching whether the company can sustain pricing power through tech innovation, and whether its second growth curve—anchored in energy storage—can sustain momentum.

The IPO is not just a capital raise. It's a statement: CATL intends to define the next era of energy. And it wants the world's capital to help fund that vision.