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Chinese group builds mega factory: Mercedes secures new source for electric car batteries

China group builds mega factory
Mercedes secures new source for electric car batteries

A new production facility for battery cells from the Chinese supplier CATL is being built in Hungary – a project worth billions. There is already a major customer in Mercedes. The location also offers the battery manufacturer other perspectives.

It will be the largest battery cell factory in Europe: The Chinese manufacturer CATL is investing up to 7.3 billion euros in a new plant in Debrecen, Hungary, and wants to produce battery cells there with a total capacity of 100 gigawatt hours a year. Subject to the approvals, construction is scheduled to begin this year, CATL announced, and the plant should then start operating within 64 months. The move is aimed at covering the needs of foreign markets.

Mercedes Benz 61.31

This is the second CATL plant in Europe after a plant in Thuringia. One of the first customers is Mercedes-Benz, it said. According to their own statements, the Stuttgart-based company has already secured battery cells from the factory. The cells are intended for plants in Hungary and Germany, it said. Mercedes Purchasing Manager Markus Schäfer spoke of a milestone: the company will receive CO2-neutral battery cells from CATL for its next-generation electric vehicles. Mercedes-Benz operates a plant in Kecskemet in central Hungary.

CATL also noted the facility’s proximity to the plants of other automakers such as Volkswagen, Stellantis and BMW. The Munich-based company is currently building its own plant in Debrecen, where the vehicles of the “New Class” are to roll off the assembly line from 2025. A BMW spokeswoman declined to comment on the CATL system and pointed out that the Munich-based company was planning a communication on batteries for early September. Initially, no comment was available from VW. According to the experts at Daiwa Capital Markets, the cell manufacturer probably chose Hungary because capacity there could be built up more quickly than in Germany. In addition, the operating costs of the system should be lower than in Germany.

Hungary hopes for economic boost

CATL announced that it would use electricity from renewable sources for the plant. The company is considering building solar power plants with local partners in Hungary. In addition, it is being checked whether the material for the battery cells can also be produced with partners in Europe. “The greenfield project in Hungary is an important step in CATL’s global expansion and will also be an important milestone in our efforts to make an outstanding contribution to the energy transition,” said CATL founder Robin Zeng.

Hungary’s Foreign Minister Peter Szijjarto said his country aims to be a local exception to the continent’s recession. “The best way to achieve this goal is to attract investment in the most revolutionary area in the auto industry, in electric mobility.” It is the largest single investment in the country’s history. Hungary has recently become a leading manufacturer of battery cells and is expanding its position with this investment.

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