China’s Contemporary Amperex Technology Co., Limited (CATL), the largest electric vehicle battery maker globally by sales, announced via a filing with the Shenzhen Stock Exchange on Tuesday that it will spend up to EUR 1.8 billion (USD 2 million) in building a manufacturing and R&D site in Germany, a significant increase from its original plan to invest EUR 240 million, which it announced last year in July.
CATL, which is headquartered in Ningde, East China’s Fujian province, said the board of directors made this decision based on evaluations on the development of its overseas business and the change of market demand, without offering further explanation.
However, the filing from July last year, which might contain more details and an explanation why CATL is considering this investment in the first place, is no longer available on the website of the Shenzhen Stock Exchange nor the investors’ section of CATL, which only showcases announcements backdated to August 2018.
A Securites Times report that time offers a clue. It said that products of CATL’s German plant will be mainly sold in Europe, with automakers based there as key target customers.
The world’s largest gasoline-powered automaker, Germany’s Volkswagen, set itself the strategic goal to become “the leading mobility company in the electric, connected era” by 2025.
Sinolink Securities analysts said in a research report on Wednesday that Europe might be the next key battlefield for battery makers following China as production capacity there only accounts for 4% of global capacity, citing Bloomberg data.
They added that battery makers, including BYD and LG Chem, are speeding up in building their production capacities in this continent.
Inside China, CATL is also enlarging its production capabilities. It set up a joint venture with First Automotive Works (FAW), China’s oldest automobile manufacturer and this JV will invest RMB 4.4 billion (USD 652.5 million) in a battery project located in Ningde, KrAsia reported in April.