AMS Winter 2022-23

EV Battery Production - CATL Europe

CATL: A rising power in European EV battery production

Matthias Zentgraf, president of Europe for China’s CATL, is tasked with localising battery cell production in Europe and meeting new technology requirements. He speaks to Christopher Ludwig as part of a panel on battery cell production at the AMS Automotive Evolution Europe Summit in Munich

CATL, one of the world’s largest lithium-ion battery cell manufacturing and technology companies, is turning electric vehicle battery manufacturing in Europe from a strategic target into a reality. In spring 2022, the Chinese technology company received approval to commission a new plant for battery cell production in Arnstadt, in the German state of Thuringia. The new factory follows the opening of a first plant to produce battery modules last year at the same location. Despite the challenges of the pandemic, rising energy costs and economic uncertainty, the battery producer is set to start production at the end of this year, according to CATL’s president for Europe, Matthias Zentgraf.


The start of cell production will be a major milestone in localising battery manufacturing in Europe. The gigafactory will have an initial capacity of 8 gigawatt hours (GWh) per year, with capacity to expand to 14 GWh.


This past summer, CATL also announced that it will invest €7.33m to build a battery cell production plant in Debrecen, Hungary, with capacity to eventually reach 100 GWh. The plant will eventually be amongst the most important in Europe and has already secured contracts from Mercedes-Benz and will be near production from Volkswagen, Stellantis and BMW, the latter of which is currently building a new factory in the same city that will build electric vehicles on BMW’s forthcoming Neue Klasse EV platform.


CATL will also supply cylindrical battery cells to BMW for the Neu Klasse, which will significantly cut production costs.

CATL opened a battery module assembly plant in 2021 in Arnstadt, and is set to start battery cell production by the end of 2022

These investments in battery cell production capacity and technology will be essential if Europe is to meet its targets for EV production and sales. They will also require other major developments in manufacturing in the automotive industry and in wider European policy and infrastructure, including the transition to renewable energy.


Zentgraf, who joined a panel on scaling European battery cell production at the first AMS Automotive Evolution summit this December in Munich, points to progress already in renewables and digitalisation in production. In an interview ahead of the event, he highlights key objectives for CATL as it ramps up output in Europe.

CATL received approval to commission its battery cell production plant, and plans to increase capacity from 8 GWh to 14 GWh

Christopher Ludwig: Can you update us on the start of production in Arnstadt – including the status of the brownfield building for battery modules, and the greenfield for cell production?

Matthias Zentgraf: The construction of the greenfield plant, which is also the first battery plant in Germany, is in the final stage and the installation of machines is in full swing so that the first cells can roll off the assembly line by the end of 2022.


In Q3 2021, CATT (Contemporary Amperax Technology Thuringia) started battery module production, and this April it received approval for battery cell production from the state of Thuringia.

What have been your key challenges in launching serial battery cell production in 2022?

We have faced a number of challenges over the past few years of ramp up including the Covid-19 pandemic, the energy crisis and a broader lack of skilled workers for this new industry.

There are plans to increase production capacity from 8 to 14 GWh. When do you expect to reach that level?

We will try every means to ramp up production to meet our target as scheduled, but the timeline will be dependent on multiple factors including government approval, the market and customer demand as well as our capacity to meet those demands.

With the high cost of energy in Germany and across Europe, have you been able to accelerate the use of renewable energy, or will you also need to pursue other alternatives to natural gas in the short to medium term?

CATL will ramp up the use of electricity from renewable energies in both plants in Arnstadt and in Debrecen. In fact, the German plant generates part of its power from the solar power panels on the rooftop of the building, and our Hungarian plant is considering developing solar power with local partners in the country.

CATL’s factories in Ningde, in Fuijan Province, and Yibin, in Sichuan, have both been recognised as world-leading facilities by the World Economic Forum – CATL is replicating technologies and strategies at its European plants

What have been key innovations or focus areas for digitalisation and Industry 4.0 for your Arnstadt plant?

Globally CATL has established an extreme manufacturing system by adopting artificial intelligence, big data, cloud computing, digital twins and other technological means to increase manufacturing efficiency. The system is able to reduce the manufacturing defect rate of cells to almost at the level of PPB – that is, one manufacturing defect per one billion cells.


Our efforts have been recognised by the World Economic Forum, as our Ningde plant and Yinbin plant, both in China, have been selected as Lighthouse factories by the World Economic Forum. So far there are only two Lighthouse factories in the battery industry, and both of them are CATL facilities.


This extreme manufacturing system will be applied in each of our global production bases.

Will you have a different production setup and capabilities in Debrecen, including for production and recycling?

Our two factories in Europe are designed to better meet customer needs. CATL will use electricity from renewable energies in both plants. In 2021, CATL has reached agreement with European partners to work on battery recycling and remanufacturing to promote CATL's localisation in Europe.

The German plant generates part of its power from the solar power panels on the rooftop of the building, and our Hungarian plant is considering developing solar power with local partners in the country.
Matthias Zentgraf, CATL Europe

Do you foresee challenges in meeting EU localisation requirements and battery passport requirements?

There will be challenges but we will work closely with our customers and partners in Europe to meet those requirements.

CATL will supply cylindrical battery cells to BMW, for example. Will these be produced at either or both of your plants in Europe?

CATL will deliver to BMW Group the new cylindrical battery cells, which will be produced at two of CATL's future battery plants in China and Europe. In fact, Qilin battery is also one of the solutions for BMW’s luxury cars.

Do you plan to produce other formats such as cell-to-chassis?

CATL is also in the process of developing CTC (Cell to Chassis), a technology that integrates battery cells into the chassis, which in turn integrates the electric motors, the electrical control unit, whole-vehicle high voltage system, and other vehicle components. It helps optimise power distribution and reduce power consumption with the support of an intelligent power domain controller.


The advanced CTC technology will enable EVs to rival vehicles with internal combustion engines in terms of purchasing cost, convenience and comfort with a larger interior space. It is expected to achieve a driving range of 1,000 km, a 40% increase over conventional technologies, and reduce power consumption (kWh/100km) to less than 12 kWh. For example, CATL and VinFast have agreed to explore various forms of cooperation on skateboard chassis.

CATL will supply BMW with cylindrical battery cell, which reduce production costs. It will produce the technology in both China and Europe

How do you think the EU and European government could better support and encourage scaling up EV battery production?

The most important objective should be to bring down energy prices

What is your advice to partners and peers in ensuring the battery production can scale up volume over the next 3-5 years?

We need our partners to Increase investment as well as to diversify their energy mix.