Chinese battery maker Contemporary Amperex Technology (CATL) is going to build its first production site in Europe in Germany, agreeing a significant contract with BMW to provide lithium-ion batteries.
The lack of Europe’s own production capabilities for the cells that power electric vehicles has prompted warnings that it could leave its vehicle industry exposed and too reliant on others.
A contract to construct the new plant was signed on Monday during a visit to Germany by China’s Premier Li Keqiang.
Around 240 million euros ($280 million) are going to be invested in the first phase of the project, Wolfgang Tiefensee, Thuringia’s minister of economic affairs, informed journalists.
BMW prepares to source 4 billion euros ($4.7 billion) of battery cells from CATL over the next few years, with 1.5 billion euros coming from the new site in Erfurt in eastern Germany, the automaker’s purchasing head, Markus Duesmann, stated.
CATL, the world’s largest maker of battery cells for electric vehicles, stated the new factory was just taking its first step in Europe.
“We want to supply all the OEMs (manufacturers) in Europe,” Chairman Robin Zeng stated. “If the Thuringia project is successful then we can consider other places.”
The CATL factory will generate about 600 jobs and reach production of 14 gigawatt hours (GWh) by 2022. CATL reached shipments of 12 GWh in last year.
German Chancellor Angela Merkel stated the CATL investment was a good step but added it did not rule out Europe eventually competing with the Chinese. “If we could do it ourselves, then I would not be upset,” Merkel stated.
The VDMA engineering industry association stated it hoped CATL’s investment could assist drive further investment in battery technology in Europe.