Contemporary Amperex Technology Co (CATL) is in talks to open plants that would serve BMW AG and Ford Motor Co. Potential sites include South Carolina and Kentucky, where those automakers have assembly plants, according to the two people. , who asked not to be identified because the talks are ongoing and private.
In the case of the potential South Carolina plant, the goal would be for battery production to begin in 2026, one of the sources said. BMW is already a CATL customer.
CATL, which counts Tesla and Volkswagen among its other customers, declined to comment.
Chairman Zeng Yuqun said on Thursday that the company was exploring possibilities of localizing production for foreign automakers in their countries.
He said CATL began mass production of batteries for overseas markets in 2021 and was looking to consolidate its position as the leading battery supplier to overseas automakers “in the next round of search for suppliers”, which he said would begin in 2026.
The Ningde, Fujian-based company is increasing its production and supply of minerals to meet growing demand for EVs. Consulting firm Wood Mackenzie said CATL is on track to more than triple its cell manufacturing capacity by 2025.
BMW said in a statement that it is “extensively examining the possibility of establishing a battery plant” in North America and purchasing battery materials from the region. “We are in talks with several partners about this,” the company said.
Ford, which declined to comment, announced plans last September to build two battery plants, jointly owned with SK, in Glendale, Kentucky. Ford also has two vehicle assembly plants in Louisville, Kentucky.
CATL’s review of battery investment comes as the US government rolls out measures to encourage investment in EVs and other Asian battery makers prepare to build factories in the US.
This week, the administration of US President Joe Biden said it would allocate more than $3 billion in infrastructure funds to fund EV manufacturing. Biden wants half of the vehicles sold in the United States to be electric by 2030.
Other Asian companies that have announced plans to build battery factories in the United States include Korea’s LG Energy Solution, SK Innovation and Samsung SDI. Japan’s Panasonic Corp is also reportedly looking to buy land for a factory to serve Tesla.
BMW has an assembly plant in Spartanburg, South Carolina. CATL will open its first battery plant outside of China later this year in Arnstadt, Germany to serve BMW and other automakers. CATL will invest 1.8 billion euros ($1.89 billion) in the plant, which will have an initial annual capacity of 8 gigawatt hours (GWh) of batteries, the company said.
The BMW Spartanburg plant, which builds the best-selling X3 and X5 sport utility vehicles as well as other models, is one of the German automaker’s largest factories and serves as a major export hub.
BMW Chief Executive Oliver Zipse said on Thursday that the German automaker aims to reach sales of 2 million all-electric vehicles by 2025 and have EVs make up at least half of global deliveries by 2030. He said the most important factor for EV production is having local suppliers.
In 2020, CATL purchased a facility in Glasgow, Kentucky, and documents from a June 2020 meeting with Kentucky economic development officials showed that the battery manufacturer was considering establishing a facility there.
Economic development officials in South Carolina and Kentucky declined to comment.
It was not immediately clear what incentives these state government agencies would offer for investment or whether the planned factories would have some kind of joint venture participation with the automakers.
Last month, CATL posted its first quarterly profit decline in two years due to soaring raw material costs and disruptions from COVID-19 controls in China. It said on Thursday it expected profit margins to improve as it raised prices in the second quarter and pressures on raw material costs eased.
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