By Rachel Liang
China's biggest electric-car battery maker said Friday that it plans to build a second battery factory in Europe, as the company doubles down overseas to gain ground in the booming electric-vehicle market.
Contemporary Amperex Technology Co. will invest up to 7.34 billion euros ($7.58 billion) in the factory in Hungary, the company said in a filing.
The plant is designed to have a capacity of 100 gigawatt hours, seven times that of its first plant in Germany, CATL said.
Located in central Europe, the new plant would enhance CATL's capability to supply European car makers such as Mercedes-Benz Group AG, Bayerische Motoren Werke AG, Stellantis N.V. and Volkswagen AG, CATL said in a separate statement.
The company plans to start building the plant this year and expects to complete the project in 64 months, it said.
Meanwhile, Mercedes-Benz said Friday that it is expanding its supply agreement with CATL.
The German car maker said the battery supplier's new factory in Hungary will supply battery cells for next-generation Mercedes-Benz models. The agreement builds on a partnership first announced in 2020, Mercedes-Benz said.
European car makers have stepped up efforts over the past two years to shift to electric models, in order to meet tougher restrictions in the region on greenhouse-gas emissions. Incentives have also driven the industry to make more electric cars and drive consumer demand.
Last year, EV sales in Europe rose 65% from a year ago to 2.3 million vehicles, according to the International Energy Agency.
In 2018, CATL invested around $1.9 billion to build its first overseas plant in Germany. The company in April received government approval for manufacturing there after a year's delay caused by the Covid-19 pandemic. It plans to roll out batteries from the German plant by the end of this year.
Write to Rachel Liang at email@example.com
(END) Dow Jones Newswires