Exclusive | Chinese EV battery giant CATL will set up research and development centre in Hong Kong, in win for government innovation hub push
- Science Park to host centre for Contemporary Amperex Technology (CATL), according to government source, with about 500 staff to be recruited
- Move by world’s biggest maker of batteries for electric vehicles would mark further win following similar announcement by drug giant AstraZeneca
The establishment of the centre would mark another win for a push by authorities to turn the city into an innovation hub, following the announcement of a similar move by UK drug giant AstraZeneca.
The CATL centre, to be established at the Hong Kong Science Park, is expected to recruit about 500 staff and begin operating next year at the earliest, according to a government source familiar with the situation.
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“The company is a giant in the industry and it aligns with the city’s development strategy to encourage the use of vehicles powered by clean energy,” the source said.
“Research and development is a start, production in the city is the next step for exploration.”
More details are expected to be revealed in a ceremony on Thursday when CATL, a Fujian-based EV battery giant, will sign a memorandum of understanding with local authorities.
CATL accounts for the largest share of the global EV battery market, according to analysts. It supplies major carmakers including Volkswagen AG, BMW, Nissan Motor and Tesla.
It announced in August that it would start producing the world’s fastest-charging EV battery by the end of 2023, two years after unveiling the first sodium-ion battery – a new technology using cheaper raw materials to save production costs.
Hong Kong has been stepping up efforts to lure foreign investment. Last month, the government’s Office for Attracting Strategic Enterprises announced that it had attracted more than 30 foreign and mainland Chinese companies which pledged to invest about HK$30 billion (US$3.8 billion) in the city, including the UK drug giant AstraZeneca.
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The drug company will set up a research base in the Lok Ma Chau Loop by late 2024 at the earliest and will focus on developing cell and gene therapies.
CATL’s plan to set up a research centre in Hong Kong comes as the EV battery firm diversifies its markets amid intensifying geopolitical risks, the latest example being its collaboration with Ford Motors in the United States.
Ford’s plan to use technology developed by CATL at its new US$3.5 billion EV plant in Michigan has been questioned by some US lawmakers, who have asked the Biden administration to review the licensing agreement to ensure no subsidies under the country’s Inflation Reduction Act (IRA) will be given to the Chinese company.
The IRA was signed into law by Biden last year and is regarded as the most significant effort in US history to curb the effects of climate change, with US$360 billion allocated for a shift towards renewable energy.
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Economist Andy Kwan Cheuk-chiu, director of the ACE Centre for Business and Economic Research, said CATL’s decision to set up a research base in Hong Kong was a strategic one as the city was an international hub on Chinese soil and the company might also consider a second listing in location.
Hong Kong was also a less sensitive location for the firm than the US, he said, adding that the centre could spur the innovation sector and help attract talent to the city.
Kwan said he believed mainland companies such as CATL could help to attract workers, especially those from the West, through the city’s Quality Migrant Admission Scheme.
“After all, Hong Kong is a place where East and West meet, and it can attract talent from different countries,” he said. “Some might not want to work in Shenzhen and prefer to work in Hong Kong in a more international environment.”
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Davis Zhang, a senior executive at Suzhou Hazardtex, a specialised vehicle batteries supplier, said CATL had reasons to increase investment in research and development outside the mainland.
“Hong Kong appears to be an ideal place to do so because of its talent pool and attractiveness to foreign businesses,” he said.
Edwin Lau, founder of Green Earth, said the development of EV batteries would play an important part in achieving the city’s goal of reaching carbon neutrality by 2050.
“If there is an advancement in EV battery technology, and the price is lowered, the pickup rate of EVs would increase further and would help replace traditional internal combustion engine-driven cars,” he said. “This could play an important role in helping Hong Kong achieve carbon neutrality and also reduce air pollution.
“Even though there are fewer cars in Hong Kong compared with the mainland, the city is an international-facing economy where [EV companies] see a beneficial position to market their technology to other places.”
Additional reporting by Ambrose Li, Daniel Ren and Martin Choi
