Benzinga | Nov 22, 2021 12:34PM EST

Tesla Battery Supplier CATL Is Now The Second Most Valued Company Listed In China

Tesla, Inc. (NASDAQ:TSLA) battery supplier Contemporary Amperex Technology Co., Ltd, popularly known as CATL, has quietly risen through the ranks, thanks to the burgeoning demand for EV batteries to power green energy vehicles.

CATL Climbs to Second Spot: Shares of CATL, which are listed on the Shenzhen Stock Exchange, rallied to a record high Monday amid expectations the battery manufacturer will be included in the CSI 300 Index, which tracks China-listed stocks.

The index, which is jointly owned by the Shanghai and Shenzhen exchanges, is expected to announce the rebalancing on Dec. 13.

With the rally, CATL's market capitalization has overtaken the valuation of state lender Industrial and Commercial Bank of China Ltd (PNK: IDCBY) by a narrow margin.

CATL ended Monday's session with a market capitalization of 1.586 trillion yuan ($248.50 billion) compared to the Industrial & Commercial Bank of China's $1.55 trillion yuan.

CATL now only lags behind only Chinese liquor maker Kweichow Moutai Co., Ltd, which boasts of a market cap of $2.329 trillion yuan.

Related Link: Tesla, Nio Supplier CATL Seeks To Raise $9B In Bid To Expand Lithium-Ion Battery Production

Why It's Important: CATL is the market leader in EV batteries, and had a robust 34% share of the market for the January to August period, according to SNE Research. South Korea's LG Electronics stood second with a share of 21.5%.

CATL is the chief EV battery supplier for major players in the auto industry, including Tesla, Nio Inc - ADR (NYSE:NIO) and Daimler AG (PNK: DDAIF).

The stock is poised for further gains in the run-up to the potential index inclusion.

The inclusion could lead to global fund managers buying about 12.9. billion yuan of CATL stock and passively managed funds that track the CSI 300 allocating 5.16 billion yuan, the South China Morning Post reported, citing Chinese brokerage Shenwan Hongyuan Group.

Related Link: EV Week In Review: Musk Tapers Stake Sale, Apple Car Chatter Resurfaces, XPeng Unveils New SUV, Rivian, Lucid Caught Up In Irrational Exuberance And More

Photo: CATL