Lithium Battery Giants Embark on a 'Long March'

Chen Dong is one of the coordinators for CATL’s joint venture project. He told the Economic Observer that in Zaragoza, Spain, a large-scale new factory will soon commence operations—signing the agreement and breaking ground both occurred at an exceptionally rapid pace. CATL’s planned investment—exceeding RMB 30 billion—with a targeted production capacity of 50 GWh, aims to begin operations by the end of 2026. The facility will specialize in cost-competitive lithium iron phosphate (LFP) batteries, directly supplying multiple brands under Stellantis. Meanwhile, Chen Dong’s colleagues are in Japan, busy finalizing a 2.4 GWh grid-scale energy storage project. CATL not only supplies the batteries but will also hold partial ownership of the power station. Turning our attention to Central Europe: In Debrecen, Hungary, EVE Energy’s factory construction has entered the intense phase of mechanical and electrical installation and commissioning. Li, the site manager, spends each day coordinating hundreds of European technical workers and Chinese engineers. His mission is to fully replicate in Hungary the large-format cylindrical battery production line—a technology already proven and matured in China. This factory, with a planned capacity of 28 GWh, is held in high regard by European customers. The relocation of the industrial chain is not a single-point breakthrough, but rather a clustered, coordinated effort. Just south of EVE Energy’s Hungarian plant, in Štúrovo, Slovakia, Guoxuan High-Tech’s battery 'super-factory' has completed its initial infrastructure development; Phase I capacity stands at 20 GWh. According to Guoxuan High-Tech representatives speaking to the Economic Observer, Slovakia was selected not only for its advantageous geographical location and favorable investment policies, but also crucially because it places the company close to the East European vehicle assembly plants of major clients such as Volkswagen and Stellantis. Alongside battery giants, materials suppliers are also entering overseas markets in support. As CATL established its presence in Spain, Tinci Materials—the leading electrolyte producer—broke ground in December on its first North American factory in Baytown, Texas. With an annual planned output of 200,000 tons of electrolyte, Tinci’s overseas business head explained that exporting electrolyte from China to the U.S. had rendered the product non-competitive due to tariffs and logistics costs. Local production—directly supplying battery clients like CATL and Envision AESC, which are building factories in the U.S.—has become the only viable option. Sunwoda’s strategy in Thailand reflects yet another logic. Its Thai subsidiary not only plans total battery capacity exceeding 17.4 GWh, but also placed, in early December, a massive procurement order—106,800 tons of lithium iron phosphate cathode material—with Lithium Source (Asia-Pacific), a subsidiary of Longpan Technology. A localized supply chain, centered on Thailand and radiating across Southeast Asia and even into Europe, is taking shape. When discussing with domestic lithium battery industry association members, Chen Dong sensed a subtle shift in the industry’s center of gravity. In the past, conversations revolved around which new domestic base had just commenced operations; now, over tea or after dinner, people ask: “How’s your team-building progressing in Europe?” “Has your North American project passed environmental review?” “What’s the electricity tariff at your Thai factory?” In Chen Dong’s view, this wave of overseas expansion differs fundamentally from earlier practices—such as simply exporting battery products or establishing small overseas assembly plants. It represents a systematic export of production capacity, technology, capital, and overall supply chain management capability. Cheng Boyong, an engineer involved in multiple overseas projects, remarked emotionally: “Before, we sold batteries packed in shipping containers. Now, we build factories on foreign soil, hire local workers, and manufacture products meeting their highest standards.”

Current Status and Future Outlook of Canada’s Electric Vehicle Supply Chain

In Ontario, this investment boom is particularly pronounced. The provincial government boldly declares its intention to invest "over USD 45 billion in transformative automotive and electric vehicle initiatives," with numerous major projects taking root here. Companies from around the world are vying for large tracts of real estate, aiming to convert them into modern physical manufacturing facilities. The Minister of Trade frequently travels overseas, tirelessly seeking additional investment partnerships to bolster Canada’s electric vehicle (EV) supply chain. (II) Optimistic Industry Expectations At the time, the entire industry was enveloped in optimism. Stakeholders widely believed that Canada—endowed with abundant natural resources, advanced R&D capabilities, and a strategically advantageous geographic location—possessed the potential to build a complete and efficient EV battery supply chain. Such a chain would not only inject powerful momentum into Canada’s domestic economic development and generate substantial employment opportunities, but also secure Canada a prominent position within the global EV industry landscape, positioning it as a key leader in sectoral advancement. Numerous enterprises unveiled ambitious development plans and announced large-scale investment projects covering critical areas including battery cell manufacturing, R&D center construction, and anode/cathode processing—everything appeared to be steadily advancing toward a bright future. III. Crisis Eruption: The Domino Effect Collapse (I) The Collapse of the Britishvolt Project However, the first warning signal of crisis in Canada’s EV supply chain emerged quietly in November 2022. Britishvolt, a UK-based startup, had originally planned to construct a massive 60 GWh battery cell 'super-factory' in Becancour, Quebec—alongside a dedicated R&D center and anode/cathode processing facilities. This project had been hailed as a pivotal milestone for Canada’s EV supply chain development. Yet unexpectedly, the company’s spokesperson announced that the project had been abandoned due to "deteriorating global economic conditions" and "a sharp decline in available investment capital." This news struck like a bombshell across Canada’s EV industry, triggering strong reverberations and laying the groundwork for a cascade of subsequent crises. (II) Ford’s Project Setbacks and Strategic Adjustments As time progressed, the crisis deepened further. This summer, a series of decisions by Ford Motor Company once again plunged Canada’s EV supply chain into turmoil. First, Ford scrapped its USD 1.8 billion plan to produce electric vehicles at its Oakville, Ontario plant. Canceling this initiative meant the anticipated expansion of production scale, technological upgrades, and synergistic development of related industrial chains would vanish—delivering a severe blow to local employment, economic growth, and cooperative relationships among upstream and downstream supply chain enterprises. Subsequently, in August, Ford announced the postponement of its USD 1.2 billion joint venture with Korean partners EcoPro BM and SK On. This joint venture aimed to build a battery cathode factory in Becancour, Quebec—a project of vital strategic importance for securing critical raw material supplies for Canadian EV batteries and enhancing domestic battery manufacturing technology levels.

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