Photo: Martin Schutt/dpa

CATL is looking for a location for a battery factory in Mexico. The proximity of the manufacturing site to the US indicates that the manufacturer may intend to supply Tesla and possibly other electric vehicle producers in the US.

Chinese Contemporary Amperex Technology Co. Ltd. (CATL), the world's largest manufacturer of electric vehicle batteries, is considering at least two locations in Mexico for a manufacturing plant that will potentially supply electric vehicle manufacturers Tesla and Ford, according to Bloomberg.

CATL is considering Ciudad Juarez in Chihuahua and Saltillo in Coahuila, according to people familiar with the discussion. Both are in close proximity to the Texas border, where Tesla Giga Austin is located. The company is considering investing up to $5 billion in the project. Ciudad Juarez is attractive in part because it is close to the port of San Jeronimo Santa Teresa, which is the entrance to the US state of New Mexico. This will provide a route through the Texas border crossing.

CATL has been thinking about building a battery factory in the US for several years, but growing geopolitical tensions between the US and China have made the task more difficult. On the other hand, competitors continue to make deals with manufacturers to build battery factories in the US, pulling ahead.

CATL can manufacture battery cells in Mexico and then ship them to Kentucky for assembly into battery packs. Documents unearthed by Bloomberg show that in 2020, the Chinese battery maker acquired the former RR Donnelley & Sons Co. printing plant in Glasgow, Kentucky and set up a subsidiary in the state.

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