CATL Could Produce EV Batteries in Mexico

China’s Contemporary Amperex Technology (CATL) is evaluating Mexico as the future location of a US$5 billion plant to manufacture EV batteries. The company is analyzing sites in Chihuahua and Coahuila to build the plant, as reported by Bloomberg.

CATL’s plant could potentially supply Ford and Tesla, which has a new factory in Texas, the US. Ciudad Juarez’s proximity to the US state of New Mexico makes Chihuahua an attractive location for CATL's future plant. CATL currently leads the global EV battery market and enjoys a 33.9 percent market share, as reported by Automotive News. In 2021, CATL was named the top company in EV battery consumption volume for five consecutive years.

CATL is characterized for its innovative technology and recently allied with Changan Automobile and Huawei to launch the AVATR 11, the first model of the All-New Smart Electric Vehicle Architecture CHN. In this project, CATL was in charge of working on batteries, motor drives, electronic control, energy management and charging station networks.

“For all AVATR models, CATL will provide the latest and the greatest batteries to build AVATR into a premier smart electric vehicle brand in China and even the world,” said Robin Zeng, Chairman, CATL.

Last month, the company also announced the launch of the third generation of its cell-to-pack technology that offers a record-breaking 72 percent volume utilization efficiency. It also achieves the highest integration level worldwide and has a range for over 1,000 km. “Focusing on the very nature of electrochemistry, CATL continues its endeavor to push beyond the boundaries of innovations in system structure,” says CATL.

The Boom of Nearshoring in Mexico

Many companies are considering bringing their operations to the Mexican north. Quanta Computer, for example, recently announced that it is bringing part of its production from Shanghai and Taiwan to its assembly plant in Nuevo Leon, as reported by MBN.

This regionalization follows the COVID-19 pandemic, which disrupted global chains and is transforming Mexico into the ideal place to relocate manufacturing for the North American market, especially following the USMCA. This treaty is boosting the nearshoring trend by changing the rules of origin to increase the regional value content (RVC) from 62.5 percent to 75 percent. Moreover, the US trade war with China has caused the former to have a trade deficit with the latter that exceeds US$600 billion. Also, the conflict between Ukraine and Russia and the commercial restrictions that have resulted are driving an integration referred to as “Friendshoring”.

“Business decisions are now considering ideologies. For this reason, it is thought that China is no longer the best option for suppliers. Mexico has emerged as the best option, not only because of its proximity to the US but also because it is better aligned in terms of business values,” said Manuel Montoya, Directo, CLAUT to MBN.