Contemporary Amperex Technology Limited (CATL) [300750:CH] is contemplating at least two locations in Mexico as the site of its new manufacturing factory for electric vehicle (EV) batteries, as reported by Caixin on July 18. CATL intends to construct a battery facility with an annual capacity of up to 80 gigawatt-hours (GWh) and a workforce of up to 10,000 people. Both locations, namely Ciudad Juarez in the Chihuahua state, and Saltillo in the Coahuila state, are close to the US-Mexico border in Texas. These two locations appeal to CATL due to their proximity to Tesla’s [TSLA:US] new factory, as CATL is a battery supplier of Tesla. According to an unidentified source, CATL may invest up to USD5bn in the manufacturing plant and may also split the investment across two locations, one in the US and one in Mexico. A decision has yet to be finalized.
The global EV battery demand reached 202 GWh in 1H22, representing a 76% increase YoY. Correspondingly, CATL’s global power battery sales in 1H22 increased 111% YoY, reaching 69 GWh and ranking first in the industry. Its market share reached 34% by mid-2022, up from 29% in the previous year. According to CATL’s annual report, Tesla was CATL’s largest customer in 2021, accounting for 10% of CATL’s total annual sales and contributing around 14% of its power battery business revenue.