NINGDE, China (Reuters) – CATL, the world’s largest battery maker, will consider building a U.S. factory if President-elect Donald Trump opens the door to Chinese investment in the electric vehicle supply chain, the company’s founder and chairman says. Robin Zeng, told Reuters.
“Originally, when we wanted to invest in the US, the US government said no,” the Chinese billionaire said in an interview last week. “For me, I’m really open-minded.”
Chinese electric car and battery makers have been locked out of the US market by a variety of protectionist trade measures backed by both Democrats and Republicans, including Trump, who launched a broader trade war with China during his first presidential term from 2017. and battery makers, which are heavily subsidized by the government, have become targets of some of the steepest trade barriers over competitiveness and national security concerns.
Chinese-made batteries are not eligible for consumer EV subsidies introduced during the Biden administration, which also decided to block any vehicle with Chinese connected-car technology. There is a 100% tariff on Chinese imports of EVs, an effective ban.
A Republican bill opposed by the Biden White House would go further and limit electric car purchase incentives for cars powered by Chinese battery technology adopted by U.S. companies such as Ford and Tesla.
The trade barriers have blocked some of the world’s leading battery and EV companies, including CATL and biggest battery rival BYD, which could otherwise help accelerate the U.S. EV transition. Unlike CATL, BYD also makes electric cars and now competes with Tesla for the global sales leader in electric cars.
Trump wants to prevent imports of Chinese cars but has said he remains open to Chinese automakers building vehicles in the United States. Trump told Reuters in an interview in August: “We’re going to give incentives, and if China and other countries want to come here and sell the cars, they’re going to build factories here and they’re going to hire our workers. .”
Such comments have kept Zeng interested in a U.S. expansion for CATL. “I really hope they are open to investment in the future,” he said.
Zeng’s comments were the first from a major Chinese supplier to U.S. automakers since Trump’s victory in the Nov. 5 election. The Trump campaign did not immediately respond to a request for comment on Tuesday.
CATL has limited its presence in the US market to licensing agreements for battery production. Ford is opening a plant in Michigan to build low-cost lithium phosphate batteries under a licensing agreement with CATL for the Mustang Mach-E and F-150 Lightning pickup.
Tesla has a similar deal to license CATL technology for battery production in Nevada. That operation is expected to start in 2025, a person with knowledge of the matter told Reuters. The time of the launch has not yet been announced.
Zeng, who spoke to Reuters on Thursday near CATL’s headquarters in Ningde, southeastern China, said the Tesla licensing deal would allow CEO Elon Musk to focus his capital investments on artificial intelligence and autonomous vehicles.
CATL is a key supplier to Tesla for the EV maker’s Shanghai factory, Tesla’s largest and most profitable.
Zeng, who met Musk when he visited Beijing in April and has spoken with him often, said he agreed with the Tesla founder’s views on the potential for AI-powered autonomous vehicle technology.
Tesla’s self-driving technology relies solely on cameras and AI in hopes of building affordable autonomous vehicles that can be sold in high volumes. Competitors mainly build more expensive vehicles with layers of redundant technology, for safety, and use them to operate taxi or delivery services.
“He’s all in,” Zeng said of Musk’s strategy. “I think it’s a good direction.”
But Zeng said he told Musk directly that his bet on a cylindrical battery known as the 4680 “will fail and will never be successful.”
“We had a really big debate and I showed it to him,” Zeng said. ‘He was silent. He doesn’t know how to make a battery. It’s about electrochemistry. He’s good for the chips, the software, the hardware, the mechanical stuff.”
Musk and Tesla did not immediately respond to a request for comment on Tuesday.
Zeng said he also asked Musk about setting unrealistic timelines for the rollout of new vehicles or technologies at Tesla. He said Musk told him he wanted to motivate and focus Tesla staffers and that anything beyond a two-year time frame might as well be “infinite.”
‘His problem is promising. I talked to him,” Zeng said. “Maybe something takes five years. But he says two years. I definitely asked him why. He told me he wanted to push people.”
Musk pledged last month to deploy fully autonomous versions of Tesla’s Model 3 and Model Y in Texas and California next year, and to release a two-seat “Cybercab” robotaxi in 2026, without a steering wheel or pedals. The prediction sparked skepticism among investors who have heard Musk promise self-driving Teslas for a decade.
Zeng did not refer to any particular unfulfilled promise from Musk, but said: “He probably thinks it will take five years, but if you believe him when he says two years, you are in big trouble. The direction is the right one.”
(Reporting by Zhang Yan and Kevin Krolicki in Ningde; additional reporting by David Shepardson in Washington; Editing by Brian Thevenot and Matthew Lewis)
