Tuesday, June 18, 2024

CATL to Build North America Battery Plant, Bolstering Tesla Supply

BusinessCATL to Build North America Battery Plant, Bolstering Tesla Supply

Bloomberg reported on March 19 that China’s leading battery firm, Contemporary Amperex Technology Co., Limited (CATL), is weighing sites across North America for a new battery plant worth $5 billion. The new facility will eventually employ as many as 10,000 workers, and will supply products to corporate customers including Tesla.

Executives from CATL reportedly flew to Mexico for a meeting earlier this month. Two individuals familiar with the matter said that the company’s new factory in North America will produce NMC batteries and ferrous lithium phosphate batteries to supply Tesla and other automakers. The company declined to comment on the matter.

In fact, it was reported in October last year that Tesla had booked 45GWh ferrous lithium phosphate batteries from the company for its 2022 sales plan, mainly to be used for its Model 3 and Model Y vehicles.

In February this year, CATL’s stock price encountered a prolonged slump. The financial turbulence was caused by a series of rumors surfacing on digital media platforms alleging that the firm faced new sanctions, would be removed from the ChiNext weighted stock index, and had failed in talks regarding potential cooperation with Tesla. The firm issued a statement claiming that the rumors had caused misunderstanding and misinterpretations across the market, and had adversely affected the firm’s reputation.

According to the performance forecast of CATL, which was established in 2011, it was estimated that the net profit attributable to shareholders of the listed company was 14 billion yuan to 16.5 billion yuan in 2021 ($2.2 billion-$2.6 billion), up 150.75% to 195.52% year-on-year in 2021.

Regarding the reasons for the performance growth, the company said: first, the market penetration rate of new energy vehicles and energy storage increased in 2021, which will drive the growth of battery sales. Second, the company had made progress in market development releasing new production capacity – therefore, production and sales increased accordingly. Third, the company strengthened cost controls, decreasing the proportion of expenses to its revenue.

SourcePandaily
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