Senior Counselor China-LatAm Legal Affairs • Greater China Business Development Advisor
“The 56-year-old founder and chairman of the world’s top electric vehicle (EV) battery-maker Contemporary Amperex Technology Co. Ltd. (CATL) struck an upbeat note in a recent interview with Caixin, saying that construction work on the company’s $3.5 billion U.S. plant with Ford is ‘progressing smoothly’ and that the prospects for EVs in China are ever brighter. However, he also acknowledged the challenges the Fujian province-based giant faces, including regulatory challenges in Europe and the difficulty of commercializing solid-state batteries, a technology that could bring an end to the ‘range anxiety’ that wards off some potential EV buyers. Progress at the Ford Motor Co. plant in Michigan shows the value of the company’s licensing, royalty and service (LRS) business model, under which automakers can produce batteries using know-how and services provided by CATL, Robin Zeng Yuqun told Caixin. Ford first announced the BlueOval Battery Park Michigan plant in February 2023.” “The project quickly encountered problems, including resistance from the Republican chairs of two U.S. House of Representative committees who in July sent a joint letter to Ford CEO Jim Farley seeking more information about the deal. In September last year, a Ford spokesperson said work on the plant would stop ‘until we’re confident about our ability to competitively operate the plant.’ That announcement came soon after the United Auto Workers union began a six-week strike at Ford and other U.S. carmakers. Ford resumed construction on the factory in November, but said it would reduce the plant’s annual production capacity by roughly 43%, which includes delaying $12 billion in spending on battery-powered models. The company said at the time that the date for initial production at the facility remained unchanged at 2026. In recent years, CATL has doubled down on its plans for global dominance with a focus on dominance in Europe” “In October 2019, CATL kicked off construction of its first overseas plant in Germany, which was up and running in December 2022. In August 2022, the firm announced it would build its second overseas factory in Hungary, whose construction is set to be completed in 2025. It has a designed annual production capacity of 100 gigawatt-hours, enough to power more than 1 million cars. The company also signed a deal in November to work with European carmaker Stellantis NV to supply the latter with battery cells and modules for its EVs in Europe. However, CATL’s expansion into Europe faces regulatory challenges. In August 2023, the EU put into force its Batteries Regulation that the European Commission says ‘aim(s) to make batteries sustainable throughout their entire life cycle.’ CATL, which has long dominated its home market, is now closing in on South Korea’s LG to become the No. 1 supplier of EV batteries in markets outside of China.”
