Economy 26 June 2025, 9:55am

CATL has decided to discontinue the largest investment in Hungary's history

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China's Contemporary Amperex Technology Limited (CATL), the world's largest battery manufacturer, has suspended the preparation of the second phase of its plant in Debrecen indefinitely. According to Hungarian news portal Telex, the decision may be due to market uncertainty caused by Trump's threats of a tariff war.

According to Telex,

CATL has stopped preparing for the second phase of the battery factory in Debrecen and has dismissed several members of the design team.

UPDATE:

Back in 2022, the company announced that it would build a factory complex with a capacity of 100 gigawatt hours in Debrecen, investing around HUF 3,000 billion in the project, which was to be completed in three phases.

Construction of the first factory, which is worth around HUF 1,000 billion, began in 2023 and is now well underway. The buildings have been completed and the production lines are being installed. Trial production is expected to begin in autumn, with mass production set to start in winter. The company plans to employ around 2,000 people for the first phase of production.

The overall investment is the largest industrial development in Hungary's history. The Hungarian state is providing approximately HUF 340 billion in funding, which will be given in phases. State aid for the first phase has not yet been received.

Although CATL remained optimistic about continuing the project in mid-May and preparatory work for the second phase was underway, including archaeological excavations and building design,

the company has now decided to suspend the project.

According to Telex, the decision is primarily motivated by the prospect of a trade war initiated by Donald Trump and the subsequent market uncertainty. Although the Debrecen plant is primarily intended to serve the European market, it could indirectly be affected by potential US tariffs, given that some electric vehicles produced in Europe are exported to the United States. Imposing high import duties could reduce demand for batteries in Europe.

The decision may also have been influenced by the ongoing lawsuit concerning the CATL environmental permit. This was initiated by NGOs who are challenging the circumstances in which the Integrated Pollution Prevention and Control (IPPC) permit was issued. This long-running legal process is a further source of uncertainty.

In response to an enquiry by Telex, CATL provided the following answer:

"In order to start production as soon as possible, we are currently fully focused on completing our first factory and commencing production. The decision to start construction of the second production unit will be made after we have carefully considered the latest innovations in battery technology and our customers' needs."