Is China’s CATL considering an EV battery production site in the US?

• The global battery conglomerate CATL is said to be in the final stages of vetting potential sites to bring EV battery production to the US.
• Two possible locations include South Carolina and Kentucky where the assembly plants of BMW AG and Ford Motor Company are located.

CATL, the world’s largest electric vehicle (EV) battery manufacturer, is apparently planning its first production in the world’s second-largest car market, the US. The plant, potentially to be located either at South Carolina and Kentucky, is reportedly to serve the Chinese giants’ clients BMW AG and Ford Motor Co.

The key Tesla Inc. battery supplier, according to Reuters, is apparently in the final stages of vetting sites in the US to manufacture EV batteries. Citing two people familiar with the matter, Reuters noted that the potential South Carolina plant could see battery production begin in 2026. As it is, BMW is a customer of CATL.

Coincidentally, the company’s Chairman Zeng Yuqun said last week that CATL has been exploring possibilities to localize production for overseas automakers in their countries. The statement basically validates CATL’s intention to expand overseas since demand from foreign clients is strong.

Zeng also clarified that CATL had begun mass production of batteries for overseas markets since last year 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.

In fact, the company is currently ramping up production and its sourcing of minerals to meet growing demand for EVs. Just last month, they won exploration rights to a lithium clay deposit in China, as EV and battery makers race to secure supplies of raw materials. CATL bid 865 million yuan (US$135 million) for the exploration rights to the deposit, which is estimated to contain about 2.66 million tons of associated lithium metal oxide, it said in a statement. 

“CATL will speed up the exploration and development of lithium mineral resources and increase the supply of lithium in a bid to bring the prices of lithium related raw materials back to a reasonable level,” the company emphasized. 

Shortly before winning the exploration rights in China, CATL announced it was partnering with state-owned Indonesian firms in a US$6 billion project covering nickel mining, battery materials, manufacturing, and recycling, in a further effort to secure a wider array of base metal resources for battery production. CATL’s strength stems mainly from China’s growing market for electric cars, hybrids and other new energy vehicles. 

To recall, in 2021, sales of these vehicles increased 2.6 times, and CATL have been expanding output capacity to tap the surging demand. According to its annual report, CATL ranked first in the world in automotive batteries for the fifth straight year in 2021. The company held a 38.6% global share in automotive batteries in 2021, up 12.6 points from the year before, according to Tokyo-based Techno Systems Research. LG Energy Solution remains a distant second, with an 18.2% share.

Yet, when it comes to overseas revenues, CATL only makes about 20% and will need to expand globally to ensure sustained growth, especially after the Chinese market is saturated. Currently, the supposed opening of a new CATL factory in Germany has been delayed by over a year to the end of 2022. 

The construction of the plant, which is also Germany’s first battery factory, is in the final stage and the installation of machines is in full swing so that the first cells can roll off the assembly lines by the end of 2022, CATL said.

 

---

---

---

---