BERLIN -- Mercedes-Benz will be the first carmaker to receive cells from a new 7.34 billion euro ($7.6 billion) battery factory that China's CATL plans to build in Hungary.
CATL said construction of the 100 gigawatt-hour plant will start this year in Debrecen, Hungary, close to auto plants operated by customers such as Mercedes-Benz, BMW, Stellantis and Volkswagen.
The factory "will enable it to better cope with the battery demands of the European market ... and help accelerate e-mobility and energy transition in Europe," CATL said in a statement on Friday.
The plant will be the supplier's second battery factory in Europe after one in Germany.
In a separate statement, Mercedes said CATL's new plant marked the next milestone toward the automaker's goal of reaching battery production capacity of more than 200 gigawatt hours at eight global production sites by the end of the decade.
The plant will supply battery cells for production sites in Germany and Hungary, Mercedes said.
"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," Mercedes management board member Markus Schaefer said.
CATL is the world's biggest electric-vehicle battery maker. Tesla is among its customers.
The Hungary investment, which has no timeline, follows a flurry of other announcements from the company on new battery sites, including a 14 billion yuan ($2 billion) investment in east China's Shandong province and a 13 billion yuan battery project in Fujian
CATL has also been considering an investment of up to $5 billion in either Mexico or the U.S.
Bloomberg contributed to this report.