CATL cars Germany’s big (Chinese-made) battery plant to dwarf Tesla’s Gigafactory

The e-car battery plant in the city of Erfurt, built by Chinese company CATL, will likely be much larger: It could be three times the size of Tesla’s US plant.
Quelle: Tesla
Call it Nanofactory instead.
(Source: Tesla)

Germany’s car industry will finally get what it couldn’t establish on its own: CATL, the world’s largest maker of battery cells for electric vehicles, has sharply increased the planned output of its first European factory to be built in Erfurt, eastern Germany.

CATL wants to increase annual capacity far beyond the original target to be reached in 2022, Matthias Zentgraf, CATL’s head of Europe, said at an automotive conference in Bochum. “We want to build 14 gigawatt hours in a first step and now estimate that we could be in the three-digit gigawatt area from 2026 at the latest.”

That would make the German battery factory even bigger than Tesla’s Gigafactory which currently makes battery cells with a total capacity of 20 gigawatt hours. The Nevada plant, jointly operated with Japanese producer Panasonic, is expected to increase annual output to 35 GWh.

German carmakers VW, BMW and Mercedes-maker Daimler, as well as their suppliers, have been slow to invest in electric-car technology. Bosch, the world’s largest component maker, gave up on setting up a battery factory last year, citing high investment costs. EU efforts to establish a European alliance have been progressing slowly.

CATL, short for Contemporary Amperex Technology Ltd, is bent on European expansion because it expects huge growth in the European electric vehicle market in response to the EU’s tighter CO2 requirements for 2030.

“A lot happened last year. The new CO2 targets will lead to a faster rise in demand than we had thought,” Zentgraf told Handelsblatt.

Fleet-average CO2 emissions from new cars are to be cut by 37.5 percent by 2030 compared to levels in 2021, a limit that looks unattainable for conventional cars alone. As a result, VW, BMW and Daimler plan a major rollout of electric models and will need battery cells.


BMW plans to source €4 billion ($4.6 billion) of battery cells from CATL over the next few years and almost half of that, €1.5 billion, is to come from the Erfurt plant. VW last year awarded contracts for electric car batteries worth €48 billion, and CATL, Korean manufacturers LG Chem and Samsung SDI are among the suppliers.

CATL has battled its way to the top of the fiercely-contested battery market in just seven years and took the title from Panasonic last year. Led by 50-year-old founder Zeng Yuqun, it wowed investors in its stock market debut in June, soaring to a market capitalization of €10.4 billion in just one day. The firm is profiting from government support for domestic players as the country embraces clean energy. Any company, domestic or foreign, that wants to sell electric cars in China must use battery cells made by one of the Chinese manufacturers.

Zentgraf said the fact that Germany’s first battery-cell factory was being built by a Chinese company was simply the result of a German business sector “that didn’t dare to do it.”

He said he didn’t see tentative plans for a battery plant by an alliance of German firms as potential competition. Firms including Aachen-based automaker Ego, battery maker BMZ-Group and start-up TerraE were considering investing in a factory in North Rhine-Westphalia with a planned capacity of 8 gigawatt hour — far less than CATL in Erfurt. Volkswagen and Ford are also considering getting involved in the project. Production in NRW could start as early as next year, although the initial output will be 4 GWh at maximum.

CATL, on the other hand, is already looking out for further possible locations in Europe. It’s checking whether it can expand the agreed 70-hectare site in Erfurt. “But if that shouldn’t be enough we’re taking a look around right now,” said Zentgraf. In Erfurt, CATL plans to break ground on the project this spring. Battery production is to start in 2021.

Kathrin Witsch is an editor with Handelsblatt's companies andmarkets team, specializing in renewable energy and commodities. Lukas Bay is a news desk editor at Handelsblatt's companies and markets department. To contact the authors: [email protected] and [email protected]