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CATL Shares Plunge on Reports of $5bn Expansion in Mexico, US

The world’s largest battery maker has reportedly been considering at least two potential sites where it can establish facilities to supply batteries to Tesla and Ford.


Shares plunged by 4.9% in Shenzhen on Tuesday following reports the world's biggest battery maker could spend up to $5 billion on facilities in Mexico and the US.
CATL is looking to supply batteries to Tesla and Ford in the US, according to recent reports. This photo shows the group's R+D centre in Ningde, Fujian province in late 2016. File photo: Reuters.

 

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.

 

READ MORE: Chip Shortage in China Could Curb Its EV Momentum

 

“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

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

Frank Chen

Frank Chen is an Asia Financial correspondent who covers China business and finance with a special focus on market indexes. He has a keen interest in real estate, transport, infrastructure and consumer brands. He spends time in Shanghai and Hong Kong and speaks Mandarin, Cantonese, and English.

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