Tesla Supplier CATL Seeks $1.5B Funding To Expand Global EV Battery Supply Chain

In a recent development, Contemporary Amperex Technology Co. Limited (CATL), a prominent supplier to Tesla Inc. TSLA, is reportedly in talks to raise a $1.5 billion fund to boost its global EV battery supply chain.

What Happened: The company, which also caters to Volkswagen and Ford, plans to utilize the fund to finance an ecosystem of companies to enhance production in Europe and other overseas markets, the Financial Times reported on Friday.

Despite having a cash reserve of $40 billion as of Mar. 31, CATL is facing hurdles in making significant international investments due to China’s stringent overseas direct investment rules. The proposed fund, managed by Lochpine Capital, would mainly target companies that could supply CATL in Europe.

CATL has also reached out to Mercedes-Benz and families behind other automakers for investment in the fund. The company is also in talks with sovereign wealth funds, family offices, oil and gas companies, and European manufacturers about potential investments.

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The fund is designed to “facilitate the global energy transition with support from like-minded partners from all over the world,” CATL said. The company is expanding in Europe as geopolitical tensions between Beijing and Washington threaten its growth plans in North America.

Why It Matters: This move comes after CATL’s significant advancements in battery technology. In April, CATL unveiled a new battery, the Shenxing Plus, capable of powering electric vehicles (EVs) for over 620 miles on a full charge. This new battery is an upgrade from the Shenxing, which was launched in August.

In June, CATL announced its plans to power electric airplanes with its high energy-density batteries, expecting them to fly more than 1,800 miles by 2028. The company is currently testing these batteries in planes.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari