World’s Largest Battery Maker Evaluating Sites In US For Battery Production

CATL Office Building

World’s Largest Battery Maker Evaluating Sites In US For Battery Production

CATL Office Building

Contemporary Amperex Technology Co (CATL), the world’s largest battery maker, is in the final stages of evaluating sites in the United States to build electric vehicle batteries, an investment that would mark the Chinese company’s first production operation in the world’s second-largest car market.

CATL’s battery plants, if realized, is in talks would serve BMW and Ford Motor Co, with South Carolina and Kentucky as potential locations for the plants. Both automakers have assembly plants in these states. 

The goal for the South Carolina plant, if the plans move forward,  would be for battery production to begin in 2026. BMW is already an existing CATL customer.

CATL’s other major customers include Tesla and Volkswagen. 

CATL Chairman, Zeng Yuqun said on Thursday the company was exploring possibilities to localize production for overseas automakers in their countries.

He said CATL had begun mass production of batteries for overseas markets in 2021 and was looking to lock in its standing as the major battery supplier to automakers overseas “in the next round of supplier sourcing,” which he said would begin from 2026.

The Ningde, Fujian, China-based company is ramping up production and its sourcing of minerals to meet growing demand for EVs. Consulting firm Wood Mackenzie has said CATL is on track to more than triple its cell manufacturing capacity by 2025.

BMW said in a statement that it was “intensively examining the possibility of establishing a battery factory” in North America and buying battery materials in the region. “We are in talks with several partners about this,” the company said.

Ford, which declined to comment, announced plans last September to build two battery plants, jointly owned with SK Innovation, in Glendale, Kentucky. Ford also has two vehicle assembly plants in Louisville, Kentucky.

The evaluation of the battery investment by CATL comes as the U.S. government rolls out measures to encourage EV investments and as other Asian battery makers gear up to build U.S. plants.

This week, U.S. President Joe Biden’s administration said it will allocate more than $3 billion in infrastructure funding to finance EV manufacturing. Biden wants half of vehicles sold in the United States to be electric by 2030.

Other Asian companies that have announced plans to build U.S. battery plants include Korea’s LG Energy Solution, SK Innovation and Samsung SDI. Japan’s Panasonic Corp is also evaluating establishing a plant to serve Tesla.

BMW has an assembly plant in Spartanburg, South Carolina. CATL will open its first battery plant outside China later this year in Arnstadt, Germany, to serve BMW and other automakers. CATL will invest $1.89 billion in that factory, which will have an initial annual capacity of 8 gigawatt-hours (GWh) of batteries, the company has said.

BMW’s Spartanburg plant, which builds the top-selling X3 and X5 sport utility vehicles, is one of the German automaker’s largest and serves as a big export hub.

BMW Chief Executive Oliver Zipse on Thursday affirmed the German automaker’s plans to reach sales of 2 million fully-electric vehicles by 2025, as well as have EVs account for at least half of global deliveries by 2030. He said the most important factor for EV production is having local suppliers.

CATL, in 2020, purchased a facility in Glasgow, Kentucky. Documents from a June 2020 meeting with Kentucky economic development officials showed the battery maker was considering establishing a facility there.

It was is not clear what incentives government agencies in those states would offer for the investment, or whether the planned plants would be part of a joint-venture participation by the automakers.

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