CATL, the world’s largest battery maker, is in the final stages of vetting sites in the United States to build electric vehicle batteries.
CATL, the world’s largest battery maker, is in the final stages of vetting sites in the United States to build electric vehicle batteries, an investment that would mark the Chinese company’s first production run in the world’s second-largest auto market. two people with knowledge of the plans told Reuters.
Contemporary Amperex Technology Co (CATL) is in talks to open plants that would service BMW AG and Ford Motor Co, and potential sites include South Carolina and Kentucky, where those automakers have assembly plants, according to the two. people, who asked not to be identified because the talks are ongoing and private.
In the case of the potential South Carolina plant, the goal would be for battery production to begin in 2026, one of the sources said. BMW is already a CATL customer.
CATL, whose other customers include Tesla and Volkswagen, declined to comment.
Chairman Zeng Yuqun said on Thursday that the company was exploring possibilities of locating production from foreign automakers in their countries.
He said CATL had started mass production of batteries for overseas markets in 2021 and was looking to maintain its position as the primary battery supplier for overseas automakers “in the next round of supplier sourcing,” which , according to him, would start from 2026.
The Ningde, Fujian-based company is ramping up production and sourcing of minerals to meet growing demand for electric vehicles. Consulting firm Wood Mackenzie said CATL is on track to more than triple its cell manufacturing capacity by 2025.
BMW said in a statement that it is “thoroughly examining the possibility of establishing a battery plant” in North America and purchasing battery materials from the region. “We are in talks with several partners about this,” the company said.
Ford, who declined to comment, announced plans last September to build two battery plants, jointly owned with SK, in Glendale, Kentucky. Ford also has two vehicle assembly plants in Louisville, Kentucky.
CATL’s battery investment review comes as the U.S. government rolls out measures to encourage investment in electric vehicles and other Asian battery makers prepare to build factories in the United States.
This week, the administration of US President Joe Biden announced that it would allocate more than $3 billion in infrastructure funding to fund the manufacturing of electric vehicles. Biden wants half of vehicles sold in the United States to be electric by 2030.
Other Asian companies that have announced plans to build battery factories in the United States include Korean company LG Energy Solution, SK Innovation and Samsung SDI. Japan’s Panasonic Corp is also reportedly looking to buy land for a factory for Tesla.
BMW has an assembly plant in Spartanburg, South Carolina. CATL will open its first battery plant outside of China later this year in Arnstadt, Germany to serve BMW and other automakers. CATL will invest 1.8 billion euros ($1.89 billion) in the plant, which will have an initial annual capacity of 8 gigawatt hours (GWh) of batteries, the company said.
BMW’s Spartanburg plant, which builds the best-selling X3 and X5 sport utility vehicles as well as other models, is one of the German automaker’s largest and serves as a major export center.
BMW chief executive Oliver Zipse on Thursday confirmed the German automaker’s plans to reach sales of 2 million all-electric vehicles by 2025 and have electric vehicles account for at least half of deliveries by 2030. He said the most important factor for the production of electric vehicles was to have local suppliers.
In 2020, CATL purchased a facility in Glasgow, Ky., and documents from a June 2020 meeting with Kentucky economic development officials showed that the battery maker was considering establishing a facility there.
South Carolina and Kentucky economic development officials declined to comment.
It was not immediately clear what incentives government agencies in those states would offer for investment or whether the planned factories would have some sort of joint venture participation by the automakers.
Last month, CATL posted its first quarterly decline in profit in two years due to soaring raw material costs and disruptions to COVID-19 controls in China. He said on Thursday he expected his profit margins to improve as he raised prices in the second quarter and pressures on raw material costs eased.
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