March 7, 2018

FDI News

New electric vehicle battery manufacturing plant

New electric vehicle battery manufacturing plant

Contemporary Amperex Technology Ltd. (CATL)

Location: Thuringia, Germany 

FDI Center’s view: After several months of speculation, CATL from China appears to have decided to locate its new electric vehicle battery manufacturing plant near Erfurt in the German state of Thuringia. Although an official announcement has not yet been made, this is expected to follow soon. CATL is China’s (and reportedly the world’s) largest automotive battery manufacturer and achieved a market valuation of $12.3bn in a partial initial public offering in June of this year. CATL also secured a major contract to supply EV batteries to BMW, with BMW being quoted at the end of June 2018 as having awarded CATL a contract worth a billion euros. CATL’s announcement follows other announcements for major new battery plants in Europe by LG, Samsung and other companies. This raises the question of overcapacity, as the planned new manufacturing capacities for EV batteries are based entirely on the projected production and sales of electric vehicles by automotive companies. Another interesting question is to what degree CATL’s choice of Germany (despite lower cost options further east) was influenced by its customer BMW, which would reflect the continuing influence that OEMs continue to have on the location decisions of their suppliers in this industry.

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