The initial public offering (IPO) on the Hong Kong stock market by battery powerhouse CATL is set to cement the role of Hungary as a battery production hub serving the European market.
The company raised at least $4.6bn in its secondary listing in Hong Kong on May 20. This made it the biggest listing of the year so far, some seven years after the company first went public on the Shenzhen stock exchange in mainland China.
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As much as 90% of the proceeds from the new IPO will go towards the development of its new facility in Debrecen, according to CATL’s IPO documents.
“The factory in Hungary can bring us closer to manufacturing facilities of main customers in Europe, which will allow us to ensure more flexible and timely supply of our products and services, ensure the stability of our customers’ supply chains and enhance localised supply capability,” reads the IPO prospectus.
Announced in 2022, CATL’s Debrecen facility is intended to reach a full capacity of 100GWh over three development stages. The IPO proceeds will fund phase I and phase II, which aim to add 34GWh and 38GWh respectively. Phase I is underway, with the company expecting production to come online by the end of the year; phase II is set to break ground in 2025.
The company expects total investment across all the three phases at €7.3bn ($8.8bn), according to the IPO prospectus, with the total construction period estimated to be within 64 months.
At full capacity, the facility will feature among Europe’s largest alongside LG Energy Solution’s facility in Wroclaw, Poland, and Tesla’s Gigafactory Berlin.
“The facility in Debrecen is CATL’s stronghold in Europe,” says Evan Hartley, research manager at Benchmark Mineral Intelligence.
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The Hungarian government supported the facility with state aid to the tune of Ft320bn ($900m), according to independent news site Telex.hu.
Battery superpower
In the summer of 2022, Prime Minister Viktor Orban announced his ambition to turn Hungary into a battery superpower. Three years on, Hungary has proven a popular destination for Asian battery producers looking to establish a foothold in the EU.
Other than CATL, other battery powerhouses of the likes of SK On and Samsung SDI are developing their Hungarian production base. Their pull is prompting battery suppliers to follow suit. Among others, China’s Zhejiang Huayou Cobalt Nickel Materials will be producing cathodes in a new factory in Acs, in north-western Hungary.
Overall, the country has attracted 22 greenfield FDI projects worth an estimated $14.4bn since 2022 (up to March 2025), according to figures from greenfield investment monitor fDi Markets. Capex-wise, no other European country has fared better; in terms of project numbers, Hungary trails western European countries like Germany, France, Spain and the UK, fDi Markets figures show.
CATL itself is developing other battery production sites in Germany and Spain.