CATL Stock Tumbles as Co-Founder Offloads 1% Stake - What’s Next for Battery Giant?

Shares of CATL took a nosedive after co-founder Huang Shilin filed to sell 1% of the company's equity—roughly $300 million at current valuations. The move comes as the battery behemoth faces mounting pressure from emerging competitors and slowing EV demand growth.

Market watchers are split: some see this as routine portfolio rebalancing, while others interpret it as a worrying signal from an industry insider. 'When founders sell, you pay attention—especially in China's volatile new energy sector,' said one Hong Kong-based trader.

The sell-off triggered a 4.2% intraday drop, erasing nearly $5 billion in market cap. Analysts note this could create buying opportunities... if you believe the lithium hype hasn't peaked already.

CATL shares decline 

The filing clarifies that the sale will not happen on the open market, which reduces its effect on the share price, but that has not stopped investors from being concerned.

On the Shenzhen A-share market, CATL’s stock slid by as much as 5.4%, while its Hong Kong-listed shares also fell. 

Notably, CATL’s cornerstone investors who have had their shares locked up will be free to sell their shares from November 19. This means about 77.5 million cornerstone shares will be freed up. 

Optimistic analysts are choosing to see the drop in stock prices as a buying opportunity. According to a trading memo from Changjiang Securities, CATL’s lithium demand could grow by up to 30% in 2026. 

In 2024, CATL reported its first-ever annual revenue decline, with revenue estimated to have dropped between 8.7% and 11.2%. But despite that, its net profit grew by 15% to around 50.7 billion yuan. 

Though impressive, the profit growth is the slowest CATL has seen since 2019. To strengthen its share price, the company initiated a share buyback and spent about RMB 254 million to repurchase just over a million shares. 

Political risks persist

To further complicate the matter, U.S. House Republicans are attempting to get the Commerce Department to restrict imports of solar and grid-related components made in China; these include battery inverters, which Republican lawmakers reportedly flagged in a letter, describing them as potential “grid-security risks.” 

Morgan Stanley analysts have pointed out that this could affect investor enthusiasm for Chinese companies in the energy storage sector by reducing demand for companies like CATL.

In earlier reports, U.S. energy officials allegedly found “undocumented communication devices” in Chinese-made inverters, which raised fears of unknowingly allowing foreigners to have remote access to sensitive information or allowing backdoor vulnerabilities to be exploited. 

CATL is building up its energy-storage business and has plans to raise capital via a Hong Kong listing, with regulatory approval secured to issue up to 220 million shares. The IPO could help the firm fund its expansion into new production and R&D projects, particularly in EV and grid-scale battery systems.

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