Chinese battery-maker Contemporary Amperex Technology Ltd (CATL), headquartered in Ningde, Fujian, China, is building its first European production site in Erfurt, Germany, reports Reuters. The contract to build the new plant was signed during a visit to Germany by China’s Premier Li Keqiang, and around €240 million ($280 million) is expected to be invested in the first phase of the project.
The company has reportedly agreed a major contract with BMW to supply lithium-ion batteries for its Electric Vehicles (EVs), with the automaker planning to source €4 billion ($4.7 billion) of battery cells from CATL over the next few years. It is thought that €1.5 billion ($1.7 billion) of these lithium-ion batteries will be be made at the German site and €2.5 billion ($2.9 billion) in China.
In addition, Reuters has previously reported that Volkswagen has secured a deal with CATL, along with Samsung and LG Chem, to deliver a combined total of €21.3 billion ($25 billion) of EV batteries. Handelsblatt, a German business magazine, reported that Daimler is also considering a purchase agreement with CATL.
“We want to supply all the OEMs in Europe,” stated Robin Zeng, CATL Chairman. “If the [Erfurt] Thuringia project is successful then we can consider other locations.”
Germany’s VDMA stated that it hopes CATL’s investment will help drive further investment in the development of EV batteries in Europe. In France, the electric vehicle segment surpassed 18,000 new vehicle registrations in the first half of 2018, according to figures from Avere France – however, the lack of EU-based production capacity for EV battery cells has raised concerns among some automotive manufacturers.
Once complete, the CATL factory is expected to produce enough batteries to supply an annual combined total of 14 gigawatt hours of power by 2022. In 2017, CATL achieved an annual battery production total of 12 gigawatt hours.