Chinese battery bigwig Catl invests 1.5 billion to expand worldwide

Contemporary Amperex Technology Co., the world's largest producer of batteries for electric vehicles, is in talks to launch a $1.5 billion fund. The Chinese giant has approached sovereign wealth funds and key customers such as the Mercedes-Benz group. The fund would help CATL expand its supply chain in Europe and other foreign markets. A CATL spokesman confirmed the plans for the fund, which will seek to tap mainly foreign investors. "The purpose of the fund is to facilitate the global energy transition with the support of like-minded partners around the world," the spokesperson said. The company has been in discussions with 'a number' of potential investors, without providing further details. The fund will be managed by Hong Kong-based Lochpine Capital. Lochpine was established in August 2023 as CATL Capital before changing its name.

CATL already has a strong presence in Europe: in addition to a factory that started up in late 2022 in Germany, in Erfurt, Thuringia, it is building a factory in Hungary, in Debrecen. Production is scheduled to start in 2025. The €7.6 billion plant will have a record annual capacity of 100 gigawatt hours (GWh) and will supply cells and battery modules to European electric vehicle manufacturers. The Chinese manufacturer also signed an agreement with Stellantis for the production of Lfp (Lithium Iron Phosphate) batteries. In addition, it has secured a licence agreement with Ford for a plant in the United States (in Marshall, Michigan) that has been the subject of heated political controversy, as a result of which the project has slowed down.

A key supplier to Tesla, CATL maintains a clear lead in the global battery market with a 37.5% share in May, according to SNE Research. In China, the world's largest Ev market, it is even more dominant with a 45% share. The company's shares in Ningde, Fujian, have risen 12.3% this year on the Shenzhen Stock Exchange. on 12 July +1.58%. The Bloomberg Electric Vehicle Price Return index, which includes Ev manufacturers, battery makers and other component suppliers, fell 19.6% over the same period.

By 2030, some 40 gigafactories are planned in Europe for battery production to limit dependency on Asian supply. These plants are expected to help increase production capacity to a quarter of global capacity. That is, if the market for electric cars, which has stalled in the Old Continent, picks up again. Among the major players, however, is CATL itself. Another important producer is the Korean LG Energy Solutions in Poland: the gigafactory in Wroclaw is currently the largest in Europe. Sweden's Northvolt is the European number one. Then there is ACC (a JV between Stellantis, Mercedes-Benz and TotalEnergies) with a plant in France. Two other projects in Germany and Italy are being reconsidered to switch production from cheaper iron phosphate and lithium cells to nickel, manganese and cobalt. Finally, Renault has a collaboration with French start-up Verkor to develop and produce high-performance batteries and a joint venture in France with Chinese manufacturer Envision AESC.