CATL is planning to produce EV batteries in the United States, testing sites, sources said

CATL, the world’s largest battery maker, is in the final stages of testing sites for electric car batteries in the United States, an investment that would mark the Chinese company’s first production in the world’s second-largest car market Reuters.

Contemporary Amperex Technology Co (CATL) is in talks to open plants that will serve BMW AG and Ford Motor Co, and potential sites include assembly plants for those automakers in South Carolina and Kentucky, according to the two men, who identified the reasons. Discussions are ongoing and personal.

In the case of a potential South Carolina plant, the goal would be to start battery production by 2026, a source said. BMW is already a customer of CATL.

CATL, whose other customers include Tesla and Volkswagen, declined to comment.

Chairman Zheng Yukun said on Thursday that the company was exploring the possibilities of localization of production for foreign automakers in their country.

He said CATL had started mass production of batteries for the overseas market in 2021 and wanted to lock its position as the leading battery supplier to foreign automakers “in the next round of supplier sourcing”, which he said would start from 2026.

In Ninde, the Fujian-based company is increasing production and collecting minerals to meet the growing demand for EVs. Consulting firm Wood Mackenzie says CATL is on track to triple its cell production capacity by 2025.

BMW said in a statement that it was “exploring the possibility of setting up a battery factory” in North America and buying battery components in the region. “We are discussing this with a number of partners,” the agency said.

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

The idea of ​​battery investment by CATL comes as the US government takes steps to encourage EV investment and other Asian battery manufacturers are ready to build US plants.

This week, the administration of U.S. President Joe Biden said it would allocate more than $ 3 billion in infrastructure funding to finance EV production. Biden wants half of all cars sold in the United States to be electric by 2030.

Other Asian companies that have announced plans to build a US battery plant include Korea’s LG Energy Solutions, SK Innovation and Samsung SDI. Japan’s Panasonic Corporation is also reportedly looking to purchase land for a plant to serve Tesla.

BMW has an assembly plant in Spartanburg, South Carolina. CATL will open its first battery plant outside of China later this year in Ernststadt, Germany, to serve BMW and other car manufacturers. 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) batteries, the company said.

BMW’s Spartanburg plant, which manufactures the best-selling X3 and X5 sport utility vehicles as well as other models, serves as the German automaker’s largest and largest export hub.

BMW chief executive Oliver Gypsy on Thursday confirmed that the German automaker plans to sell 2 million fully electric vehicles by 2025, and that by 2030 at least half of the global deliveries will have EVR accounts. He said the most important reason for EV production is local suppliers.

In 2020 CATL bought a facility in Glasgow, Kentucky, and documents from a June 2020 meeting with Kentucky economic development officials showed that the battery maker was considering setting up a facility there.

Economic development officials in South Carolina and Kentucky declined to comment.

It was not immediately clear whether government agencies in these states would provide incentives for investment or whether there would be joint-venture partnerships by automakers at the planned plants.

CATL posted its first quarterly profit fall in two months last month due to rising raw material costs and constraints due to COVID-19 control in China. It said on Thursday that it had raised prices in the second quarter and expected profit margins to improve as raw material spending pressures eased.

(1 = 0.9507 euros)

(Reporting by Zhang Yan in Shanghai, Christoph Staitz in Frankfurt, and Ben Kleman in Detroit; Additional reporting by Christina Aman in Berlin and David Shepardsson in Washington; Editing by Kim Kogil)

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