BEIJING, September 22 (TMTPOST)— Contemporary Amperex Technology Co. Ltd. (CATL), the world’s largest power battery manufacturer, is shifting its focus to Europe to increase production amid ongoing uncertainty of U.S.-China relationship.

Source: Visual China

CATL is considering building the third facility to produce electric vehicle-used batteries in Europe, and has not made clear decision or movements on it yet, Matthias Zentgraf, the company’s regional president in Europe, said in an interview with Bloomberg Thursday. The Chinese electric vehicle (EV) battery giant has internal discussions about the new factory while it won’t decide to set up until it sees prospect for the demand volume, according to the official.

Zentgraf admitted the shortage of natural gas, a key energy source, made very challenging for CATL to make battery cells in Europe, especially in German, where boasts the company’s first factory in the region as well as the first one outside its homeland China. Gas accounts for half of energy needs of the factory located in Erfurt, the capital of the Central German state of Thuringia. The construction of the German plant was in the final stage and aimed to make first cells by the end of 2022, CATL said in April.

The possibility of new factory came right after CATL announced last month to invest 7.34 billion euros to build a 100 GWh battery plant in Debrecen of east Hungary, its second battery plant in Europe. CATL expected the Debrecen plant to better cope with the battery demands of the European market, and improve its global production network development, as it noted the project 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 was reported in March to weigh investing $5 billion to set up facilities across North America to supply Tesla and other customers. A report two months later said the battery maker mulled splitting the investment between two locations in U.S. and Mexico, both near the border of Texas, which is the home of Tesla’s new factory.

However, CATL’s investment in Americas was forced to be postponed. In the start of August, Bloomberg sources said the company decided to hold off its announcement about building battery plants in North America until September or October, given the concern of triggering more tensions following the U.S. House Speaker Nancy Pelosi’s trip to Taiwan, a region China always claim to be part of the country. As the highest-ranking U.S. politician to visit Taiwan in 25 years, Pelosi plunged relations between China and the United States to a new low.