The project, which will be CATL's second in Europe after one based in Germany, covers an area of 221 hectares in Debrecan of east Hungary. It is to supply both cells and modules to European automakers.

"Debrecen is located at the heart of Europe, and with close proximity to some auto plants of its customers such as Mercedes-Benz, BMW, Stellantis and Volkswagen, CATL's Debrecen plant will enable it to better cope with the battery demands of the European market, improve its global production network development, and help accelerate e-mobility and energy transition in Europe," CATL said.

The company said it is examining the possibility of joining forces with local partners to establish facilities for battery materials in Europe in an effort to build a sustainable and circular battery value chain.

The project is to use electricity from renewable energies, and CATL is considering developing solar power with local partners.

Mercedes-Benz Group board of management member Markus Schafer said: "This new state-of-the art European CATL plant in Hungary is another milestone for the scale-up of our EV production together with our key partners".

"With CATL we have a technology-leader as our partner to provide us - as the first and biggest customer of the new plant's initial capacity - with top-notch CO2 neutral battery cells for our next generation EVs in Europe, hence following our local-to-local approach in procurement," he said.

Construction on the facilities is scheduled to start this year.

CATL's share price was CNY 516.51 (US$76.4) on 15 August, having risen 3% year on year.