Chinese battery giant CATL has slowed its planning for investment in battery plants in North America on concern that new U.S. rules on sourcing battery materials will drive costs higher, two people with knowledge of the matter said.
The world’s largest battery maker, which supplies one of every three electric vehicles, has been considering opening new plants in the United States and Mexico since earlier this year, Reuters reported previously.
The planned investment in northern Mexico, South Carolina or Kentucky would be part of an expansion for CATL beyond China, where it controls almost half of the battery market, and serve major automakers who are customers, including Ford and BMW, people with knowledge of the process have said.
But CATL executives have slowed the process of vetting sites for potential new plants in North America since late August when the United States imposed tough new restrictions on the sourcing of material used in EV batteries, two people, who spoke on condition they not be named, told Reuters.
Executives from Volkswagen, BMW, and Hyundai have urged U.S. legislators to give automakers operating in the United States more time to meet the required battery sourcing targets to qualify for tax incentives.
China, led by CATL, dominates the EV battery supply chain, producing about 70% of battery cells made globally. It also has a dominant position in refining key materials including cobalt and manganese.