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Chinese EV Battery Giant Zeroes In on Its First Europe Plant

Updated on
  • CATL about to pick site in EU to take on LG Chem, Samsung SDI
  • Germany, Poland, Hungary said to be countries being considered
China’s government is putting its might into becoming a global force in new-energy vehicles.

The Chinese supplier of electric-vehicle batteries that’s planning a local factory with enough capacity to surpass the output of Tesla Inc. has set its sights further: Europe.

Contemporary Amperex Technology Ltd. is close to picking one of three sites in the European Union for its first overseas plant, Chairman Zeng Yuqun said in an interview. The company is exploring Germany, Hungary and Poland for the plant, according to a person familiar with the plan who asked not to be identified as the information isn’t public.

“We see a big opportunity in Europe,” Zeng said on the sidelines of the National Committee of the Chinese People’s Political Consultative Conference in Beijing. “Korean companies, using a low-price strategy to compete with us, haven’t made much technological progress in the past two years, while we have managed to grow fast and surpass them.”

The Breakneck Rise of China’s Colossus of Electric-Car Batteries

The expansion in Europe comes on top of a plan to build a factory in the company’s home base of Ningde, Fujian, that would quintuple its production capability and make it the world’s largest EV battery cell maker. A pending $2 billion initial public offering would help finance the construction of the plant in China. The European facility would supply major carmakers in the region, including BMW AG, Zeng said on Monday.

CATL, as the company is known, is one of the manufacturers spawned by China’s aggressive push for cleaner air and fewer oil imports. The company, which already sells the most batteries to the biggest electric-vehicle makers in China, is looking for a location in Europe with the lowest cost and the demand for electric vehicles on the continent would dictate the capacity, Zeng said.

Volkswagen AG has already agreed to use CATL batteries in models it makes in China. That could lead to more overseas contracts for the cell maker and a shot at a chunk of the 50 billion euros ($62 billion) VW plans to spend to power its EVs over the next decade or so. Nissan Motor Co. has also chosen CATL for a new EV model it plans to introduce in China soon, people familiar with the matter said, asking not to be named. Representatives at Nissan and CATL declined to comment.

Battery Pack Prices Decline 80% in Last 7 Years

Source: Bloomberg New Energy Finance

The company will open a sales office in Japan in May, Liang Chengdu, dean of CATL Research Institute, said last week in Tokyo. Japanese carmakers including Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. have all said they are considering CATL batteries for their local EVs in China. CATL also opened a sales office in the U.S. last year.

— With assistance by Yan Zhang, and Jie Ma

(Updates with Volkswagen spending plan in fifth paragraph.)
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