Contemporary Amperex Technology (CATL) will soon decide on building a battery factory in Germany as part of a major venture into Europe, news agency sources have said.

People cited by Bloomberg said China's biggest maker of battery cells for electric vehicles is considering a site in the German state of Thuringia for the plant and is also exploring potential sites in Poland and at least one other country in Europe.

A CATL spokesman declined to comment to Bloomberg.

The report said CATL plans to sell 10% of its stock in an initial public offering to finance expansion beyond China which has become the world's leading market for battery powered cars with policies favouring such models over petrol or diesel powered cars, part of government efforts to cut cities' extreme levels of air pollution.

Based in the southeastern port city of Ningde, CATL had been considering starting production in Europe since early this year Bloomberg said.

It noted there's a shortage in the region where auto parts makers have been reluctant to allocate the significant funds needed to challenge dominant Asian producers Samsung SDI, LG Chem and Panasonic. Robert Bosch reportedly decided about three months ago against making battery cells, citing costs exceeding EUR20bin (US$23.5bn).

According to Bloomberg Daimler procurement executive Sabine Angermann said her company was talking with CATL over a possible supply deal in Europe. It added Volkswagen, BMW, Nissan Motor and Hyundai Motor are already CATL customers.

Bloomberg also noted a German battery plant could help ease an expected workforce restructure in the country's automotive industry highlighted by the IG Metall labour union this week. Producing electrified vehicles is likely to add 25,000 jobs by 2030 though another 75,000 positions in engine and transmission making are likely to disappear, the labour group was cited as saying in a report.

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