Shares of Contemporary Amperex Technology Ltd (CATL) fell 4.9% in Shenzhen on Tuesday following reports that the EV battery maker may spend up to $5 billion on facilities in Mexico and the United States.
The world’s largest battery maker has been considering at least two potential sites where it can establish facilities to supply batteries to Tesla and Ford, according to one report, which said Ciudad Juarez in Chihuahua, and Saltillo, in Coahuila, were two current options.
Ciudad Juarez is close to a port of entry to the US state of New Mexico, and not far from Tesla’s Gigafactory in Austin Texas.
There had also been speculation that CATL may set up a factory in Kentucky, possibly in addition to a separate facility in Mexico.
“The Mexican plant is yet to be confirmed by CATL with more details, so investors are not impressed,” said David Zhang, chief of EV research at Jiangxi Provincial New Energy Technology Institute. “Even if it’s real, it will be so far along in the process – from site selection to negotiation to navigating the regulatory maze.”
CATL, which currently has nearly a third of the world’s electric vehicle battery business and has supplied batteries to a host of leading foreign and domestic carmakers, has yet to comment on the developments.
But the group, based in Ningde in China’s Fujian province, is cashed up at present after raising $6.7 billion in a private placement last month, which was the second-largest capital markets transaction in the world so far this year.
- Jim Pollard and Frank Chen