China’s CATL will build a US$7.5Bn battery plant in the city of Debrecen, increasing its position in Europe. 

Construction on the factory will start later in 2022 and work on the 221-hectare site is expected to be completed by 2028.  It will have a capacity of 100GWh per year, making it the largest gigafactory in Europe.  The plant will supply lithium-ion cells/modules to BMW, Mercedes, Stellantis and Volkswagon among others.

CATL’s investment is the biggest greenfield investment in Hungary’s history but the world’s largest battery player is not alone in choosing Hungary to locate new capacity.  The country is fast becoming a European hub for battery and automotive manufacturing.  In part due to attractive subsidies, Nio, SK On, Samsung SDI and GS Yuasa all have lithium-ion assets under development in the country.  Meanwhile, with regard to car production, BMW is building a plant in Debrecen, Audi has a factory in Gyor and Mercedes-Benz has a factory in Kecskemet. 

The news serves to reinforce the scale of CATL’s growth ambition.  CATL had an annual battery production capacity of 170GWh last year with 140GWh of capacity under construction. The company aims to install a total of 670GWh annual capacity by 2025.  Reports suggest that, despite geopolitical tensions, the company also intends to develop battery production capacity in North America by 2026.