Mercedes-Benz And CATL To Build Massive EV Battery Plant In Hungary

Mercedes-Benz is to work with Chinese battery maker Contemporary Amperex Technology Co. Ltd. (CATL) to build Europe’s biggest battery factory in Hungary with an investment of up to 7.3 billion euros ($7.6bn, £6.17bn) amidst soaring demand for electric vehicles.

CATL said it would begin construction of the 100 GWh plant in Debrecen, in eastern Hungary, later this year pending regulatory approvals, with construction planned to take no more than 64 months, or under three years.

The plant is to be CATL’s biggest overseas investment and is planned to manufacture batteries for BMW, Stellantis and Volkswagen in addition to Mercedes-Benz.

“There is no doubt that our plant in Debrecen will enable us to further sharpen our competitive edge, better respond to our European customers, and accelerate the transition to e-mobility in Europe,” said CATL founder and chairman Robin Zeng in a statement.

EV batteries

The plant would represent Hungary’s biggest-ever investment and would create about 9,000 jobs, Hungarian deputy foreign minister Levente Magyar told the MTI state news service.

Mercedes said the batteries would be used in its next-generation electric vehicles, set to go on sale in around three years’ time.

Carmakers are embarking on ambitious plans to ensure they have supply of critical parts, such as batteries, as they look to sell more electric vehicles, with VW building six battery plants in Europe alone.

Mercedes, Stellantis and TotalEnergies are creating a 7bn euro battery joint venture and plan to build eight plants around the world, while the EU is backing the formation of a locally based supply chain for EV batteries led by Sweden’s Northvolt.

‘Milestone’

Debrecen is already the site of an EV plant being built by BMW, while Volkswagen’s Audi has a factory in Gyor in western Hungary and Mercedes operates a plant in central Hungary’s Kecskemet.

Mercedes management board member Markus Schaefer said the plant was a “milestone” in the expansion of the company’s EV production.

CATL previously said it would begin making cylindrical cells for BMW from 2025 for new electric vehicles.

It said it was investigating joining with local partners to establish battery materials facilities in Europe and is considering an investment of up to $5bn in either Mexico or the US.