Tesla supplier CATL to produce battery cells for 120,000 electric cars annually as German state greets Chinese investors
Contemporary Amperex Technology, China's largest electric-vehicle (EV) battery manufacturer, is set to complete its first investment in Europe after gaining approval for a facility in Germany, putting it closer to Tesla and other major customers.
The company received the green light to produce battery cells in the state of Thuringia, part of its 1.8 billion euros (US$2 billion) bet to capture the global shift in demand for EVs, it said in a statement late on Tuesday. The firm currently builds cells into modules from an existing facility acquired in 2019.
The plant, its first outside China as well as Germany's first, will allow the firm known as CATL to get closer to Tesla and other major customers in the region. The US carmaker opened its Gigafactory in Berlin, about a 3.5-hour drive from Thuringia, last month.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
The project "provides a fundamental impetus for the urgently needed energy transition," said Matthias Zentgraf, CATL's president for Europe, adding that the approval process was exemplary. "We are glad to be the first company to receive approval" to manufacture Made-in-Germany batteries, he added.
Hopes fade for China-EU investment deal as Ukraine war dominates summit
The approval suggests Germany is keeping its door open to global investors including from China, despite recent misgivings. China's stance on the Ukraine invasion has prompted European leaders to warn countries against helping Russia evade sanctions. An EU-China investment deal has stalled since last year.
CATL's plant in Thuringia, Germany. Photo: Handout alt=CATL's plant in Thuringia, Germany. Photo: Handout>
CATL stock fell 2.1 per cent in Shenzhen on Wednesday in a generally weak broader market amid concerns Covid-19 lockdowns will crimp manufacturing and undermine the official 5.5 per cent growth target for 2022. The stock has weakened 11 per cent so far this year.
The Thuringia plant is in the final stage of construction and machine installation, the company said, with an annual production capacity of 8GWh when it starts operating by the end of 2022. That would equip about 120,000 cars, a company spokesman said in response to an email query.
"Our German plant is poised to provide high-quality products and services for major carmakers in Germany," he added, declining to disclose its customers.
Tesla's Gigafactory can roll out 500,000 battery-powered EVs at maximum capacity, more than double Germany's output in 2020.
Chairman Robin Zeng Yuqun told stock analysts recently that CATL would strengthen the distribution of its overseas bases in the future, including a push into the North American market. It is in early discussions with its US partners to build plants in Mexico and Canada, according to recent reports.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.
