BATTERY giant Contemporary Amperex Technology Co. Ltd. (CATL) is planning a 13.1-billion-yuan (US$1.97 billion) initial public offering (IPO) in Shenzhen to drive its expansion and meet soaring demand for electric car batteries.

CATL said in an prospectus it would issue 217 million new shares, or about 10 percent of its enlarged capital, using the funds to build two battery plants, including a giant 24 gigawatt hour (GWh) facility that would massively boost its output.

The IPO suggests a valuation of around US$20 billion.

The Ningde-based firm’s move to list on China’s NASDAQ-style ChiNext board would give investors a potential way into a firm pegged as one of China’s electric car battery champions.

China, the world’s largest market for electric cars, is driving a seismic shift towards new energy vehicles (NEVs), and wants to build a dominant domestic industry of both NEV carmakers and battery manufacturers to help drive that push.

The government has set strict quotas for electric and hybrid cars that comes into effect from 2019. It has a target of 2 million NEV sales by 2020 and has signaled longer-term it will phase out the sale of conventional petrol engine cars.

In the prospectus, CATL said it had brought in 14.9 billion yuan in sales last year, up almost threefold versus 2015. Net profits were up sharply also to 3.1 billion yuan.

The funds will help CATL boost its lithium-ion car battery output, helping hit earlier targets of 50 GWh by 2020. CATL competes with Japan’s Panasonic Corp., South Korea’s LG Chem, local rival BYD and Tesla Motor.(SD-Agencies)