Tesla’s Chinese battery maker scopes out factory sites in Mexico
CHINA’S Contemporary Amperex Technology Co Ltd (CATL), the world’s biggest maker of batteries for electric vehicles, is considering at least 2 locations in Mexico for a manufacturing plant to potentially supply Tesla Inc and Ford Motor Co
The battery manufacturer is considering Ciudad Juarez, in the state of Chihuahua, and Saltillo, in Coahuila, said sources familiar with the deliberations. Both are near the Texas border. The company is contemplating an investment of as much US$5 billion in the project, they said.
Ciudad Juarez is attractive in part because it is close to the San Jeronimo-Santa Teresa port of entry into the US state of New Mexico. That would provide a route around the border crossings of Texas, which is the home of Tesla’s new factory but in recent months has taken measures that complicated shipping and entry into the US.
Texas Governor Greg Abbott in April increased inspections of commercial vehicles, stating a desire to crack down on illegal drug trafficking and immigration. But analysis by one economics research body found that it cost the state’s economy more than US$4 billion in lost output due to shipping delays and bridge blockades.
CATL, as the Ningde, China-based company is known, is also considering splitting its investment across 2 locations — one in the US and one in Mexico, the people said. A final decision hasn’t been made, and the total size of the investment is fluid. Bloomberg reported in March that the investment could build an 80 gigawatt-hour factory.
The battery maker and Dearborn, Michigan-based Ford declined to comment. Austin, Texas-based Tesla didn’t respond to a request for comment.
CATL’s shares jumped 3.5 per cent on Monday (Jul 18) in Shenzhen.
Backed by China’s strategic push into electric cars, CATL is riding a boom in demand for EVs as countries work to reduce carbon emissions and consumers embrace cleaner cars. The company, which completed an initial public offering in 2018, controls more than 30 per cent of the global EV battery market.
CATL has been contemplating a battery plant in the US for years, but rising geopolitical tensions between the US and China have complicated the effort. It is also under competitive pressure to speed a decision as rivals like LG Energy Solution Ltd, Samsung SDI Co and Panasonic Holdings Corp ink deals with auto-makers to build battery plants in the US. BLOOMBERG
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