DOMESTIC battery giant Contemporary Amperex Technology Co.’s board approved a plan to sell up to 58.2 billion yuan (US$8.9 billion) of shares to expand the Shenzhen-listed firm’s production capacity amid intensifying competition in the clean energy space.

The massive fundraising comes as the firm, widely known as CATL, expands battery manufacturing capacity around China and in Germany.

CATL will sell shares to 35 investors at most. Proceeds will also be used to build several battery factories in Fujian, Zhejiang and Guangdong provinces in China and to boost capital. In addition, it will use the capital to develop battery technologies for energy storage facilities.

The placement, for long-term development, shouldn’t have much impact on CATL’s current shares outstanding considering its relatively small size, CATL said in a statement to domestic media Friday. CATL rose as much as 5.56 percent before closed the day up 0.05 percent Friday.

As the global auto industry accelerates transformation towards electrification, CATL is supplying electric vehicle (EV) batteries to a swathe of automakers including Tesla Inc., Volkswagen AG and Geely.

CATL controls about 30 percent of the world’s EV battery market, ahead of South Korea’s LG Energy Solution at around 25 percent and placing above Japan’s Panasonic Corp. and fellow Chinese firm BYD Co.

Investors’ willingness to buy into the clean energy story has allowed CATL to raise significant amounts of money. In July last year, it completed a private stock placement of 20 billion yuan. CATL said it targets an internal rate of return of over 16 percent on its projects.

China International Capital Corp. raised its earnings estimates for CATL in light of the planned new share sale, saying the proceeds should help with capacity expansion and boost CATL’s market share.

Other market watchers were more reserved with analysts from Morgan Stanley led by Jack Lu, saying the equity raising wasn’t necessary from an operating perspective.

Like its rivals, CATL has been battling a hike in raw materials prices. Last month, it unveiled a sodium-ion battery, a type of lower-density cell that uses cheaper raw materials than batteries made from lithium-ion metals and which can be used for energy storage or low-speed electric vehicles. (SD-Agencies)