CATL to invest EUR7.34 billion to build battery plant in Hungary

Proceeding with its goal of setting up a local battery value chain, the world-leading manufacturer CATL recently announced a plan to build a second battery plant in Europe. The facility will be located in Debrecen, Hungary, with an annual capacity of 100GWh.

The China-based company said it would invest EUR7.34 billion (US$7.52 billion) in the project. Construction of the first production facilities will start by the end of the year, subject to the shareholder meeting approval. It will be the largest battery cell plant in Europe once it is built.

CATL plans to make cells and modules at the 221-hectare plant for its Europe-based customers. Locating in Debrecen’s Southern Industrial Park, the factory is close to Mercedes-Benz, BMW, Stellantis and Volkswagen plants.

Mercedes-Benz would be the first and biggest customer of the Hungarian plant’s initial capacity. Markus Schafer, the automaker’s CTO responsible for development and procurement, said CATL’s new project would help Mercedes-Benz get closer to a battery capacity milestone, according to Reuters. The carmaker aims to achieve over 200GWh through eight production sites worldwide by 2030.

According to Phoenix New Media, Hungary has grown to be the fifth largest EV battery manufacturing country in the world, with its central location in Europe and subsidy programs. SK On and GS Yuasa built their plants in the country before CATL’s arrival.

According to a press release, CATL will use renewable energies to produce batteries at the new plant, considering developing solar power with local partners in Hungary. Moreover, it is evaluating opportunities to establish battery materials facilities in Europe with other companies.

Robin Zeng, founder and chairman of CATL, said the plant in Hungary would enable the company to sharpen its competitive edge, better respond to European customers and accelerate the transition to e-mobility in Europe.

The battery maker has scaled up its businesses outside China. CATL’s 2021 annual report showed that its overseas revenue grew 252% from the previous year, reaching CNY27.8 billion (US$4.1 billion).

It broke ground on its first overseas battery factory in Germany, Contemporary Amperex Technology Thuringia GmbH (CATT), three years ago. In April 2022, CATT received approval from the State of Thuringia for battery cell production, planning to commission later this year. The annual capacity will increase from 8GWH to 14GWh eventually.

On the other hand, according to the Yano Research Institute (YRI) of Japan, the adoption of battery electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV) in Europe and China has significantly facilitated the expansion of the automotive lithium-ion battery market worldwide.

According to a report from the research firm in July, when measuring the lithium-ion batteries market for BEV, PHEV and HEV with battery capacity, the global market reached 371.1GWh in 2021, growing 120.9% from 2020. BEV battery market enjoyed the most growth, 125.6%.

YRI projected that the global capacity will surpass 1,004GWh in 2030 if the automotive battery market keeps booming at the current speed, three times that of 2021.

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