Chinese battery giant CATL inaugurated its first European plant in Germany on Thursday, a vital link in the electrification of carmakers on the continent, AFP reported.

CATL, one of the world leaders in this field, plans to produce 30 million lithium-ion batteries per year, enough to power up to 350,000 electric vehicles, at this plant located in the Thuringia region (center) near the city of Erfurt.

According to the group, one production line is already operational and five more lines are due to start up in the coming months with a total production capacity of 14 GWh.

Up to 1.8 billion euros were invested in this project, making it one of the largest Chinese investments in Germany.

The plant in Arnstadt is the first plant in Europe for the CATL (Contemporary Amperex Technology) group, which plans to open another plant in Hungary.

It illustrates the dependence of European automakers, which are in the midst of an electric transition, on Asian battery suppliers, a market dominated by Chinese, Japanese and South Korean groups.

The German BMW group has decided to buy from CATL, and Mercedes plans to become the main customer of the group’s future plant in Hungary.

To bridge the gap and reduce its dependence on this strategic sector, the European Union has allocated several billion euros in investment aid. European battery manufacturers do not have enough production to meet the needs of the continent’s automakers.

Volkswagen wants to become the first European manufacturer to produce several of its own batteries. The group plans to build six European megafactories with a capacity of 40 GW/h each, as well as one in the USA.

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