Tesla’s battery supplier CATL loses trillion-yuan value marker as Shanghai lockdown compounds stock slump

Name: How Covid shut down Shanghai
Uploaded: 2022-04-20T08:06:48.000Z
Duration: 5 min 59 s
Description: How Covid shut down Shanghai

Stock slumped 7.6 per cent in Shenzhen, bringing this year’s pullback to 31 per cent, or US$63 billion, amid lockdown-related production hiccups

CATL is the world’s biggest maker of lithium-ion batteries for electric vehicles, and counts Tesla and Xpeng among its customers

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CATL is the world’s biggest maker of lithium-ion batteries for electric vehicles, and counts Tesla and Xpeng among its customers. Photo: Martin Schutt/dpa

Zhang Shidong

Published: 4:06pm, 20 Apr 2022

A three-month slide in Contemporary Amperex Technology Ltd, a major Tesla supplier, has knocked its market value below 1 trillion yuan (US$156.3 billion) for the first time in about a year. Part of that is because of Covid-19 production hiccups.

The stock slumped 7.6 per cent to 407 yuan in Shenzhen on Wednesday, capping a 31 per cent or US$63 billion rout this year and valuing the electric-vehicle (EV) battery maker at 949 billion yuan. Its capitalisation has held up above the trillion-yuan level since May 31, according to Bloomberg data.

The setback mirrors the fallout in China’s stock market, with the Shanghai Composite Index ranking as the worst performer among major Asia-Pacific equity benchmarks. Policymakers in Beijing have disappointed investors this month by withholding their stimulus firepower.

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How Covid shut down Shanghai

Partial and citywide lockdowns across more than 50 municipalities and provinces, including major commercial and technology hubs in Shanghai, Shenzhen and Zhengzhou, have affected CATL facilities, and could leave the auto industry at a standstill, according to EV maker Xpeng, a CATL customer.

“Shipments would be a major issue for CATL now because of supply-chain disruptions nationwide,” said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. “Investors keep asking whether its profit margins will be eroded, with higher material costs and difficulty in shipments.”

Coronavirus: Shanghai’s daily new Covid-19 cases dip below 20,000 for the first time in 13 days as weeklong standstill order ends

The decline has soured investor sentiment around so-called clean-energy stocks, from EV battery makers to carmakers and renewable-energy producers, which enjoyed a meteoric boom before and after China pledged its 2030 peak-emissions and 2060 net-zero target.