Tesla Stock (TSLA) Gets a Tow Higher as Battery Maker CATL Revs Up $4.6B IPO Success

Shares in EV giant Tesla (TSLA) rode higher today dragged along by the successful IPO of its battery maker CATL.

China-based Contemporary Amperex Technology Co – or CATL – raised $4.6 billion when it listed in Hong Kong today with its shares closing 16% higher.

EV Doubts Lifted

CATL makes over a third of all EV batteries sold around the world to major automakers like Tesla, Volkswagen (VWAGY) and Toyota (TM),

Its performance was viewed closely by analysts and investors, as well as Tesla chief executive Elon Musk no doubt, given recent concerns over faltering EV demand. That’s down to consumer concerns over the price of the vehicles, a rowback in some countries such as the U.S. on clean energy and the impact of Trump’s tariffs. There have also been worries over a slowing Chinese economy.

CATL is relatively shielded from the tariffs as 70% of its revenues come from the Chinese market. However, it can’t quite escape the claws of the U.S. as it has been placed on the U.S. Department of Defense’s list of firms it claims works with China’s armed forces. CATL denies this.

Despite this, it remains a major supplier to Tesla, providing lithium iron phosphate batteries for its Shanghai factory.

Tesla in a Jam

Despite a recent stock revival there are still worries over Tesla’s performance. That’s down to the general concerns plaguing the EV sector, a need to revamp its models but also Musk’s role in the Trump administration.

However, Russ Mould, investment director at AJ Bell in the U.K. believes the CATL success could be a boost.

“Strong demand for shares in CATL on its stock market debut implies investors still believe they can make money from the electric vehicle revolution,” he said. “Investors seem to have focused on its big exposure to the Chinese EV market which is motoring along nicely. That’s the company’s bread and butter – sales in other parts of the world are the jam on top, and perhaps investors are hoping they will become tastier in time.”

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