$10.6b EV battery plant planned for Hungary

CHINA’S Contemporary Amperex Technology Co. Limited (CATL) – the world's biggest electric vehicle battery maker – is preparing to begin construction of a new €7.34 billion ($A10.56b) battery plant in Hungary to help it meet demand from global car manufacturers.

Construction of the 100GWh battery plant in the Hungarian city of Debrecen – and CATL’s second European plant – will begin “within this year” and will cover a 221-hectare site, eventually supplying both cells and modules to European vehicle manufacturers.

The plant’s proximity to the production facilities of existing CATL customers including BMW, Mercedes-Benz, Stellantis and Volkswagen means it will be able to better serve the demands of the European market and help to accelerate e-mobility and energy transition in Europe, CATL says.

Debrecen is already home to a plant being built by BMW, while Audi has a factory in the western Hungarian city of Gyor and Mercedes-Benz another in Kecskemet in the country’s central district.

The Ningde-based manufacturer says it is also looking to join forces with a European solar panel producer and is seeking local partners to establish facilities from which to source battery materials from within the EU.

“There is no doubt that our plant in Debrecen will enable us to further sharpen our competitive edge, better respond to our European customers, and accelerate the transition to e-mobility in Europe,” said CATL founder and chairman, Dr Robin Zeng.

“The greenfield project in Hungary will be a giant leap in CATL’s global expansion, and also an important step in our efforts to make an outstanding contribution to the green energy drive for humankind.”

CATL says the facility should take no longer than 64 months to complete once construction begins.

Despite tensions between Beijing and Washington, the Chinese company is also moving ahead with plans for battery production in North America by 2026 for clients including the Ford Motor Company.

In a separate statement to Automotive News Europe (ANE) this week, Mercedes-Benz said it would be the first European manufacturer to partner with and receive battery cells from CATL’s Hungarian plant, and that its order marked the highest initial order volume for the site.

“This new state-of-the-art European CATL plant in Hungary is another milestone for the scale-up of our EV production together with our key partners,” said Mercedes-Benz Group board of management member Markus Schäfer.

“With CATL, we have a technology leader as our partner to provide us – as the first and biggest customer of the new plant’s initial capacity – with top notch CO2 neutral battery cells for our next generation EVs in Europe, hence following our local-to-local approach in procurement.

“We are proud to see our Ambition 2039 (plan) supported by CATL’s commitment to CO2 neutral production in Hungary,” he said.

The Hungarian minister of foreign affairs and trade, Péter Szijjártó said CATL’s investment in the Debrecen site may help it to counter the effects of the recession predicted to impact much of continental Europe.

“Both the global and European economies have been faced with tremendous challenges recently,” said Mr Szijjártó.

“We in Hungary have a clean goal to be a local exception from the continental recession. The best tool to achieve this goal is to attract state-of-the-art investments in the most revolutionary branch of the automotive industry, namely electromobility.”

“We are proud that CATL decided to execute the biggest ever greenfield investment in the history of Hungary. We have recently become one of the leading battery production sites of the world and, with this huge investment, we further strengthen our position,” he said.

CATL said previously that it would be supplying cylindrical battery cells to BMW from 2025 for its new generation of electric vehicles.

Mercedes-Benz, Tesla and Volkswagen have all announced or began implementing major battery expansion plans in Europe (see links below) to secure access to vital cells and raw materials to support their electrification strategies.