The world’s leading battery manufacturer, CATL, is open to building a plant in the United States if President-elect Donald Trump encourages Chinese investment in the electric vehicle supply chain. CATL founder and chairman, Robin Zeng, told Reuters on November 7 that the company, which supplies Tesla Inc. and other major automakers, would be keen to set up a U.S. plant if permitted by the government.
The U.S. government has previously been cautious about allowing Chinese investments in its electric vehicle and energy storage sectors due to concerns about potential control over critical technology, similar to past issues with telecom giant Huawei. However, a senior White House official stated in January that the government would not restrict the use of Huawei technology in upcoming federal projects, helping to ease some of these concerns.
Zeng said he is optimistic that the Trump administration will welcome more investments from large foreign companies. He added that he hopes to sign an agreement with Ford Motor Co in 2023 to build lithium ferrous phosphate batteries for the Mustang Mach-E and F-150 Lightning pickup. Ford will hold a 100-percent stake in the plant while licensing the tech from CATL.
CATL also has a six-year-old factory in Germany and is building a new plant in Hungary. Its European plants are expected to become profitable in 2025 and 2026, respectively, he said. He added that there added that the new Hungarian plant would have an even lower cost base because of its location and planned capacity.
According to its 2022 annual report, CATL currently has a 37% share of the world’s battery market. It produces E.V. traction batteries for clients, including Tesla and BMW. It also makes energy-storage systems, which accounted for about 80% of the total sales of its battery systems last year.
Zeng said the business of developing and managing green-energy electric grids, which he sees as a potentially “ten times larger” market than supplying E.V. batteries, will help drive growth for his company. He said he expects CATL to offer independent power systems big enough to run a data center or even a city. But the fire that ripped through part of his company’s plant in Thuringia, in eastern Germany, last week could be a setback to those plans. Videos published by the local media and posted on Weibo, a popular social network, showed large parts of the facility in flames and thick gray smoke rising into the air. The company has not commented on the cause of the blaze. Its statement, however, pointed to a “low risk” for the fire’s impact on production and that it had been notified of the incident by authorities. Unlike other Chinese firms, CATL hires mostly European staff for its overseas operations to avoid raising regulatory red flags. That strategy is smart, says Niclas Poitiers, an analyst at Bruegel, a think tank that analyzes international trade issues.
