Explainer | Can Chinese EV battery makers CALB, Tianqi Lithium recharge Hong Kong’s appetite for IPOs?

Successful listings by CALB and Tianqi Lithium will be a shot in the arm for the Hong Kong exchange in the absence of multibillion-dollar IPOs this year

Their applications come as the price of lithium has surged over the past year amid surging EV demand

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A lithium battery factory in China’s eastern Jiangsu province. Photo: AFP

Published: 8:30am, 15 Apr 2022

China Aviation Lithium Battery (CALB) and Tianqi Lithium, two key players in the world’s biggest electric vehicle (EV) battery market, have applied to list on the Hong Kong stock exchange with the aim of raising at least US$1 billion each. The firms are keen on expanding capacity amid a bottle neck in the global supply of lithium.

Jiangsu-based CALB and Sichuan-based Tianqi filed their applications to the city’s bourse in the first quarter and are waiting for an approval from the exchange’s listing committee. The successful launch of their deals will be a shot in the arm for the exchange, given a lack of multibillion-dollar initial public offerings (IPOs) this year.

With the fourth-largest lithium reserves globally, China controls about 80 per cent of the global lithium battery supply chain. It had an installed capacity of 154.5 GWh (gigawatt hours) last year. Lithium is a key material used in EV batteries.

CALB’s and Tianqi’s IPO applications come as the price of lithium has surged over the past year amid surging EV demand. The spot price for lithium carbonate, for example, has shot up by about nine times over the past year.

Beijing has pledged to reach peak carbon dioxide emissions by 2030 and net-zero by 2060. To reach this goal, the government has implemented various policy incentives to promote the use of EVs, which propelled the country to the top of the global EV sales chart last year with 3.33 million vehicles – or half of the world total – sold.