February 21, 2025
Korean battery-makers brace for CATL European expansion South Korean electric vehicle battery-makers are preparing for China’s CATL, the world’s leading EV battery producer, as it expands its presence in Europe’s clean mobility market. CATL is reportedly seeking a Hong Kong listing to raise at least $5 billion to fund its operations in Hungary. While the exact size of the deal remains undisclosed, a portion of the funds is expected to support a 7.3 billion euro ($7.6 billion) battery plant in Hungary, marking CATL’s second European facility after Germany. The plant, slated for mass production in the latter half of this year, will have an annual capacity of 100 gigawatt-hours, sufficient to power more than 100,000 EVs. According to CATL, its key corporate clients include Mercedes-Benz, BMW, Stellantis and Volkswagen. Shifting tides in Europe Korean battery-makers are downplaying CATL’s growing presence in Europe, citing their longstanding relationships with major car manufacturers. An industry source on condition of anonymity, said: CATL appears to be pursuing a Hong Kong listing to secure stable funding. If the company increases investments in facility expansion and research and development, this could affect Korean companies, “However, since we are carrying out our planned production in Europe, the impact would be minimal.” Despite this confidence, CATL has steadily gained market share from Korean firms in recent years. Notably, Mercedes-Benz is expected to adopt CATL’s cost-effective lithium iron phosphate batteries for its next-generation budget models, such as the EQA and EQB, starting in 2024 and 2025, respectively. The German luxury automaker has also confirmed that CATL’s Hungary plant will supply battery cells to its production sites in Germany and Hungary. Previously, Mercedes-Benz had relied on SK On’s more expensive nickel-manganese-cobalt batteries for these entry-level models. While SK On operates three battery plants in Hungary, the company stated that its battery applications for Mercedes-Benz may vary by country. Meanwhile, LG Energy Solution, which supplied batteries for the EQC sedan, currently lacks an active partnership with Mercedes-Benz to expand its European presence. The company reportedly secured a deal last year to supply 50.5GWh of 46-series cylindrical batteries annually, measuring 46 millimeters in width, though these cells will be produced in Arizona, not in its Poland factory, and are targeted at the US market. Samsung SDI is locked in a fierce battle with CATL over battery supply deals with BMW. Samsung SDI is contracted to provide 2.9 billion euros worth of batteries over a 10-year period starting in 2021, while CATL’s agreement spans 7.3 billion euros from 2020 to 2031. In 2022, BMW selected CATL and EVE, both from China, as battery suppliers for its next-generation EV lineup, Vision Neue Klasse. Strategic expansion Industry insiders believe CATL’s European expansion via Hungary―despite already being listed on the Shenzhen Stock Exchange in 2018—is driven by rising US-China geopolitical tensions. The US Defense Department recently labeled CATL, along with Tencent, as being linked to the Chinese military. Another industry source, said: Among European countries, Hungary offers significant policy incentives, including EV consumer subsidies and investment benefits, as part of its ambition to become Europe’s top battery hub. This has encouraged CATL to expand its supply capacity in the region, Unlike the Trump administration’s EV policy, which paused federal funding for electric vehicles, the European Union remains committed to banning the sale of new internal combustion engine vehicles by 2035. This regulatory shift is expected to further increase the strategic importance of CATL’s Hungary plant, the source added. Although the EU imposed definitive tariffs on Chinese-made EVs in October 2024, ranging from 17 percent to 35.3 percent, negotiations are ongoing with Chinese automakers over a potential compromise. Discussions include setting minimum sale prices and adjusting export volumes for European markets. This follows complaints filed by BYD, Geely and SAIC with the Court of Justice of the European Union, challenging the import tariffs. READ the latest Batteries News shaping the battery market Korean battery-makers brace for CATL European expansion, source Business Development
