China’s CATL to build electric car battery plant in Germany

BMW Confirms iX3 Will Be Made In China From 2020

German automakers, including Volkswagen and BMW, are fearful that the country may not have sufficient production facilities to meet the demand for electric vehicle battery cells, as the country's major automakers make plans electrify their model lineups.

News of the battery factory has been swirling around for weeks, and BMW confirmed today that it had committed to sourcing €4 billion ($4.7 billion) worth of battery cells from CATL once the factory in Erfurt is up and running in 2021.

BMW and Chinese partner Brilliance Automotive Group Holdings signed an agreement Monday to expand their joint venture BMW Brilliance Automotive, the German automaker said in a press release.

Around 240 million euros ($280 million) will be invested in the first phase of the project, Wolfgang Tiefensee, Thuringia's minister of economic affairs, told journalists.

"Our agreement sets a long-term framework for our future in China - a future involving continued investment, further growth and a clear commitment to the development and production of electric vehicles", said BMW CEO Harald Krueger said.

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Duesmann said BMW had invested in some of the costs for the CATL factory in Erfurt, but declined to say how much. CATL reached shipments of 12 GWh in 2017. "I don't rule it out", he said.

However, Ferdinand Dudenhöffer, professor of automotive economics at the Center for Automotive Research in Duisburg, said that the CATL battery-cell plant is a good thing for Germany and would help keep German carmakers competitive. "We welcome the decision of CATL to manufacture in Germany and are in talks regarding this", a spokesman said.

The privately held company, a leading auto industry supplier, has opted out of making lithium-ion battery cells, saying it would take an investment of 20 billion euros to catch a fifth of the European market by 2030.

Duesmann said BMW would only conclude contracts where inhuman conditions and child labour were ruled out.

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