CATL: Hungary EV battery plant still a 'go'

CATL batteries are displayed during an expo in Xiamen, Fujian province. [Photo provided to China Daily]

Contemporary Amperex Technology Co Ltd, the world's largest battery maker for electric vehicles, told China Daily that its battery plant in Hungary is "proceeding as planned", rebutting market rumors that the Hungarian plant had halted construction plans due to environmental issues.

Industry experts said that the plant is no doubt a "win-win "project for both China and Hungary, especially as the Central European country is striving to woo Chinese manufacturers to create a global hub for EV batteries.

Covering an area of 221 hectares — equal to around 280 soccer fields — CATL's planned gigafactory is located in Debrecen, Hungary, and aims to supply both cells and modules to European automakers under a deal announced in August last year.

With a battery production capacity of 100 gigawatt-hours, it has attracted a total investment of 7.34 billion euros ($7.28 billion) from the Chinese battery giant and is expected to create 9,000 new jobs for locals.

Zhang Xiang, an auto sector researcher at the North China University of Technology, said: "The plant is of great significance to Hungary as the government seeks more ties with Eastern partners like China. It will also help accelerate its plan to become a major EV hub under the European Union's plan to ban new internal combustion engines from 2035."

Peter Szijjarto, Hungarian minister of foreign affairs and trade, noted earlier that the investment is "the biggest ever greenfield investment" in the history of Hungary, allowing the country to become one of the leading battery production sites of the world.

"Both global and European economies have been faced with tremendous challenges recently. We in Hungary have a clear 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," he said.

Zhang pointed out that recent years have witnessed rising preferential policies offered by the Hungarian government for Chinese companies, especially under the Belt and Road Initiative. Hungary was one of the first countries in Europe to sign a Memorandum of Understanding with China on jointly building the BRI.

Chinese electric-vehicle maker Nio announced in June last year plans to build its first overseas factory in Hungary while computer maker Lenovo also announced in the same month that its first European manufacturing facility in Hungary had started operations.

"For CATL, the Hungarian plant will also help it to get closer to automakers such as Mercedes-Benz, BMW and Volkswagen to gain a lead in the European market and boost overseas expansion," Zhang added.

Despite the unstable global supply chain due to the COVID-19 pandemic, CATL is beefing up its international presence with more overseas plants. It announced in late December that it had achieved mass production of lithium-ion battery cells as scheduled at its factory in the German state of Thuringia.