CATL(宁德时代) is exploring the possibility of setting up a factory in the US as the world’s biggest electric car battery maker seeks to expand its footprint overseas, Chinese media Yicai Global reported.

CATL has communicated with its US clients, including both new energy and traditional auto manufacturers, on possible modes of co-operation including localized production, according to an investor research note released yesterday in which CATL spoke with 50 investors including Hillhouse Capital, Sequoia Capital, and Singaporean sovereign fund Temasek.

However, CATL said there are still many specifics that need to be taken into account, including worker training, unions and other factors that affect quality and cost. Its biggest challenges for future development are its growth rate, organizational capacity and internationalization of staff, it added.

Source: Yicai Global 

One US energy storage firm has expressed interest, but it still needs to look at production capacity, customer demand and manufacturing costs.

CATL, based in Ningde, southeastern Fujian Province operates 10 plants and uses core chips from the U.S. in its battery management system. The company is said to be in the process of developing its chips.

The Yicai Global report said that the short-term rise in the cost of raw materials, including lithium carbonate, will have a certain impact on CATL, but can be hedged in various ways. Copper and aluminum usage, for instance, can be greatly reduced through new technologies.

The Yichai Global report added that CATL’s share price was trading up 1.81 percent at RMB536.55 ($85) on February 16 mid-day. The stock plunged last week, wiping $34.5 billion off its market value, although it has rallied somewhat since then. The rout was unlikely to be due to the firm’s performance and probably has more to do with tightening global liquidity conditions and growing competition, analysts said at the time.