Electric vehicle battery giant CATL has slowed plans for a new plant in North America due to new rules on sourcing battery material as an excuse to push costs higher in production, Reuters cited two insiders familiar with the matter as saying.
CATL previously planned to build electric vehicle battery production facilities in Kentucky, South Carolina and Mexico. The plan, the production facility will be used to supply electric vehicle manufacturers such as Ford and BMW.
However, plans have been pushed back several times. First, because of the visit of Nancy Pelosi, Chair of the US House of Representatives to Taiwan, which created tension between Washington and Beijing.
After the impact of Nancy Pelosi’s visit to Taiwan subsided, This time, the company seems to be taking issue with the government’s Inflation Reduction Act.
The Inflation Reduction Act (IRA) requires that makers of 50% of the key minerals for manufacturing EV batteries come from North America by 2024. The percentage will increase to 80% by the end of 2026. One of the goals of the IRA is to reduce dependence on China for battery raw materials. electric vehicle.
If inside information proves correct, CATL will be the first manufacturer to delay or cancel a decision to build a plant in the US. The IRA’s rules on battery materials have been a drag that has slowed down CATL’s investment plans.
The regulation is said to raise the cost of manufacturing batteries in the United States to a higher level than shipping them from China. Even if the US government offers subsidies to CATL to build factories.
CATL’s own installed production capacity could reach over 670 GWh by 2025, even without a new US plant. In comparison, CATL produced cells with a volume of 170.39 GWh in 2021.