Hungary wins its largest investment ever: €7.3 billion Chinese-funded CATL battery plant will supply Mercedes, BMW, and VW

The biggest battery plant in Europe is going to be built in Hungary, representing a major investment coup for the country’s East-looking foreign policy

editor: Remix News
author: John Cody

The largest investment in Hungary’s history to date is being realized in Debrecen, where the Chinese Contemporary Amperex Technology Co. Limited (CATL), the world’s largest battery manufacturer, is establishing its second European plant worth approximately HUF 3 trillion forints (€7.3 billion).

“As a result of more than two years of negotiations, the Contemporary Amperex Technology Co. Limited (CATL) facility will be built on an area of ​​221 hectares, thereby creating about 9,000 new jobs in Hungary,” announced Levente Magyar, the parliamentary state secretary of the Hungarian Ministry of Foreign Affairs and Trade.

“The Chinese investment will be implemented in the field of electric vehicle production. This also confirms that the government made the right decision when it announced the strategy of opening up to the East and defined the electric vehicle industry as one of the main axes of Hungarian economic development,” the state secretary added. 

Magyar said that the government’s goal is for Hungary, through development and investment, to dodge the deepening crisis that is plunging Europe into an economic crisis. The investment not only represents Hungary’s biggest investment, but the plant also is the biggest investment ever from CATL in an overseas operation.

The facility will be the largest battery plant in Europe and will supply a range of automakers, including Mercedes, Volkswagen, and BMW. As Europe shifts towards electric vehicles, it should play a vital role in helping supply the transition.

The company wrote in a statement that “Hungary — and Debrecen in particular — boasts a stable business environment, advanced infrastructure and logistics connections, a long-standing automotive industry, and a considerably competitive workforce, making it a perfect choice for CATL’s second European battery factory. As the Hungarian plant will be close to some of its customers’ car plants, such as Mercedes-Benz, BMW, Stellantis, and Volkswagen, CATL will be able to better meet the battery demand of the European market, develop its global production network, and contribute to accelerating e-mobility and the energy transition in Europe, the statement said.”

As part of its commitment to reduce the carbon footprint of battery production, CATL will use electricity from renewable energies and will consider implementing solar-based developments in Hungary in cooperation with local partners.

In order to build a sustainable and efficient battery value chain, CATL is also investigating the possibility of establishing battery raw material production facilities in Europe together with local partners.

“Our factory in Debrecen will certainly enable us to further increase our competitive advantage, better satisfy the needs of our European customers, and accelerate the transition to e-mobility in Europe,” said Robin Zeng, founder and president of CATL. He added that the greenfield investment in Hungary will be a giant leap in CATL’s global expansion, and also an important step in its efforts to contribute significantly to humanity’s transition to green energy.

CATL’s European customers have welcomed the new project. Markus Schäfer, member of the board of directors of Mercedes-Benz Group AG and technical director responsible for development and procurement, said: “CATL’s new, modern European plant in Hungary is another milestone in the expansion of electric vehicle production together with their key partners.”

“In CATL, we have found a high-tech partner that will provide us, as the first and largest customer for the new plant, with the highest-quality carbon-neutral battery cells for next-generation electric vehicles in Europe, following our procurement approach of favoring local partners,” says Markus in CATL’s announcement Schaefert.

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