(Yicai Global) July 19 -- Contemporary Amperex Technology has refused to comment on a report in the US media that the Chinese battery giant is planning to spend CNY33.7 billion (USD5 billion) to build a factory in Mexico to supply electric car batteries to the US market, The Paper reported yesterday.

CATL is scouting out sites in Mexico to build a battery factory that could supply Tesla and Ford Motor, Bloomberg reported yesterday, citing an informed source. The firm is considering at least two locations along Mexico’s border with Texas, it added.

CATL is in talks with major overseas carmakers about how to provide them with the products and services they need in their own localities, Chairman Zeng Yuqun said at the firm’s 2021 earnings conference in May.

“CATL has discussed with US clients about possible partnership solutions and the feasibility of making vehicles close to them, but the firm must take into consideration the impact of employee training, efficiency and trade unions on product quality and costs,” Zeng said.

Ningde, southeastern Fujian province-based CATL counts global auto giants Tesla, BMW, Volkwagen and Mercedes-Benz as its clients. It also supplies Chinese startups Nio, Li Auto and Xpeng Motors, Kaiyuan Securities said in a recent research report.

The firm’s client mix is decentralized, with around 15 percent to 20 percent of shipments going to Palo Alto-based Tesla while less than 10 percent goes to each of its other customers. By contrast, the top three clients of other big battery manufacturers account for over 50 percent of their sales.

CATL’s first overseas plant in Freistaat Thuringen, Germany is expected to come online later this year. Costing EUR1.8 billion (USD1.83 billion), the factory has a designed annual capacity of 14 gigawatt hours and will supply batteries to Munich-based BMW and other nearby automakers. It was granted a permit in April to produce 8 GWh of batteries a year.

Editor: Kim Taylor