Chinese company Contemporary Amperex Technology Co. Ltd. (CATL), one of the world’s largest manufacturers of batteries for electric vehicles, is regarding to build a large new plant and is considering various sites in North America. The company will supply batteries to various customers of the company, including Tesla. The project budget is estimated at $5 billion.
Image source: catl.com
According to the agency Bloomberg citing its own sources, the facility will employ at least 10,000 workers and have an annual capacity of up to 80 GWh. At the beginning of the month, top managers of CATL visited Mexico, where they held meetings on this issue; the United States and Canada are also considered, but in their case the company is concerned regarding the availability of labor and the difficulty in doing business.
Due to the global trend towards environmentally friendly transportation and the Chinese state program to support the electric vehicle industry, the demand for CATL products is extremely high. The company, which completed its IPO in 2018, has now captured regarding 30% of the global traction battery market. The presence in North America will allow the Chinese manufacturer to significantly reduce duties when delivering products to Tesla and other customers. The large scale of the company’s operations and significant investment in research and development have enabled it to maintain low production costs and low prices for finished products.
On the other hand, the American expansion of CATL might be a serious problem for US officials: Washington is investing heavily in the budget to get rid of Chinese dependence in the electric car industry, but the program will take years to implement. The vast majority of automakers are electrifying their products, generating strong demand for the battery market, and nickel, cobalt and lithium used in batteries are rising in price, partly because of this. Tesla in October of last year, she switched part of the line to LFP elements, which are cheaper and more stable, but also offer a shorter range. Recently followed suit Rivian.
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