The world’s greatest maker of electric-vehicle batteries, China’s Up to date Amperex Know-how Co. Ltd., is contemplating a 3rd manufacturing facility in Europe, the corporate’s president within the area, Matthias Zentgraf, mentioned.

“We’re fascinated about this, however at present there is no such thing as a clear resolution or exercise,” Zentgraf informed Bloomberg Information in an interview, saying inner discussions are already underway.

The corporate final month introduced plans to construct a second European plant in Hungary, investing 7.3 billion euros ($7.2 billion) in partnership with Mercedes-Benz.

The ability has a deliberate output of 100 gigawatt hours and also will provide Volkswagen Group, BMW and Stellantis.

CATL expects it to be prepared inside 5 years.

“We is not going to construct a 3rd plant if there is no such thing as a prospect for the demand quantity,” Zentgraf mentioned in a video name from the IAA Transportation convention in Hanover, Germany.

CATL has maintained a lead over rivals, together with the world’s second-biggest cell producer LG Power Resolution.

The corporate rebounded from its sharpest-ever drop in quarterly earnings at the beginning of 2022, with first-half internet earnings rising 82 % from a 12 months earlier and income leaping 156 %.

CATL has established a number of manufacturing bases in China and subsidiaries within the U.S., Japan and Europe. It’s spending 27 billion yuan ($3.8 billion) on two battery initiatives in China’s Shandong and Fujian provinces.

Zentgraf declined to touch upon whether or not CATL would provide batteries to Tesla’s new manufacturing facility in Berlin.

The battery maker has additionally been websites in Mexico and the U.S. to provide Tesla, Ford and others, although that course of has been delayed partially as a result of political tensions between China and the US, Bloomberg reported in August.

CATL is because of begin producing batteries at its first European plant, within the central German metropolis of Erfurt, later this 12 months. One problem is the continent’s vitality disaster and rising fuel costs following Russia’s invasion of Ukraine. Greater than half of Germany’s fuel imports got here from Russia earlier than the conflict.

“We’re affected with the scarcity of pure fuel, which is essential for the cell manufacturing course of as a result of we want numerous vitality,” Zentgraf mentioned. Gasoline accounts for about half of the German plant’s vitality wants.

“We’re engaged on substitutions for this intensively,” mentioned Zentgraf, who joined CATL in 2015. “We have already got a really, very promising thought to switch pure fuel to purchase renewables.”

Contingency plans will allow the plant to remain operational by winter if fuel provides fall brief or costs are too excessive, he mentioned.

Zentgraf referred to as for the EU to supply extra versatile state support to assist localize and develop the EV-battery provide chain and complement billions of {dollars} of funding from battery makers.

“Focus that subsidy cash into increase the availability chain for battery companies total,” he mentioned.