Photo: CATL
CATL is the largest battery manufacturer in the world. In China, it supplies Tesla with LFP cells and several local companies with ternary cells. With Tesla’s decision to start using LFP batteries in its cars in the U.S., CATL will have to produce them locally or at least nearby. According to Bloomberg, it has plans for a $5 billion, 80-GWh cell plant in North America.
We mentioned this larger region instead of the U.S. because Canada and Mexico are also in the dispute to receive the investments. Thanks to the USMCA free-trade deal that replaced NAFTA, anything produced in any of these countries is treated as if it is local to any of them. In other words, batteries made in Canada or Mexico will be treated as American cells – at least until anything changes.
After Joe Biden said he wanted to promote EVs made by American factories with unionized workers with incentives, Canada and Mexico said they would sue the American government for protectionism. The WTO (World Trade Organization) would probably agree with any of these two countries. If things escalate and CATL has a Mexican or a Canadian factory, it will have problems selling to American automakers installed in the U.S.
The Chinese battery producer probably has that in mind, which will make an American factory the most likely possibility for this massive production facility. On the other hand, such a plant would have to be competitive so that CATL does not lose supplying contracts for other giants planning to establish in the U.S., such as LG Energy Solution and SK Innovation.
Whatever the decision is, CATL will certainly offer LFP cells to its customers, which will make cars with this cheaper and more robust chemistry more frequent in the American market. BYD could try to compete with CATL in the American market with another factory, leading the U.S. government to fear a Chinese invasion. As Bloomberg reminds us, Biden’s administration is trying to help American battery companies flourish. At this point, it is either too late, or the U.S. companies will have to deliver better products, such as solid-state cells.
After Joe Biden said he wanted to promote EVs made by American factories with unionized workers with incentives, Canada and Mexico said they would sue the American government for protectionism. The WTO (World Trade Organization) would probably agree with any of these two countries. If things escalate and CATL has a Mexican or a Canadian factory, it will have problems selling to American automakers installed in the U.S.
The Chinese battery producer probably has that in mind, which will make an American factory the most likely possibility for this massive production facility. On the other hand, such a plant would have to be competitive so that CATL does not lose supplying contracts for other giants planning to establish in the U.S., such as LG Energy Solution and SK Innovation.
Whatever the decision is, CATL will certainly offer LFP cells to its customers, which will make cars with this cheaper and more robust chemistry more frequent in the American market. BYD could try to compete with CATL in the American market with another factory, leading the U.S. government to fear a Chinese invasion. As Bloomberg reminds us, Biden’s administration is trying to help American battery companies flourish. At this point, it is either too late, or the U.S. companies will have to deliver better products, such as solid-state cells.
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