A multibillion-dollar deal with the world’s largest battery maker for electric vehicles is on the rocks after United States House Speaker Nancy Pelosi escalated tensions between China and America by visiting Taiwan.
Contemporary Amperex Technology Co. Ltd, known as CATL, has been considering a few north American locations for battery manufacturing plants: one in the U.S. and two in Mexico near the Texas border.
CATL, is a global leader in lithium-ion battery development. The company was set to make a $5 billion investment in the project, which would produce batteries for electric vehicles. Multiple automobile manufacturers, including Tesla, Inc., BMW, and Ford Motor Co., would have benefitted from the deal.
Ford and CATL recently announced that they had an agreement where the battery manufacturer would supply battery packs for Ford’s Mustang Mach E-s and its F-150 Lightning truck.
Pelosi’s recent visit to Taiwan, however, has soured U.S.-China relations. According to Bloomberg, CATL is not planning to wait until September or October to make the announcement.
China’s Ministry of Foreign Affairs made a statement calling Pelosi’s trip “a serious violation of the one-China principle.” They made it clear that Pelosi’s visit had a severe impact on China-U.S. relations.
“It gravely undermines peace and stability across the Taiwan Strait, and sends a seriously wrong signal to the separatist forces for ‘Taiwan independence,'” Chinese officials stated. “China firmly opposes and sternly condemns this, and has made serious démarche and strong protest to the United States.”
Earlier this year, the White House announced plans to invest more than $3 billion into domestic electric vehicle manufacturing.
Taxpayer dollars would go to funding grants for the programs by going through the trillion-dollar bipartisan infrastructure bill.
According to the company’s website CATL has been ranked number one globally in battery consumption for the past consecutive five years. It is also a member of the World Economic Forum’s Global Lighthouse Network.
Ahead of Pelosi’s visit, Chinese officials closed Fujian airspace, sent army tanks to Fujian beach, and conducted live-fire drills in waters near Fujian. CATL’s headquarters are located in Fujian, across the Taiwan Strait.