Ask a battery executive what has been hardest about building in Europe and you expect an answer about regulation, permitting or energy prices. Matt Shen, who runs CATL's European business, does not hesitate.
People.
His reasoning is short. You can find the process. You can find the equipment. What you cannot easily find in Europe is the people, because the industry has no history here. It is new.
The rest of the conversation is a fairly unsentimental account of what a company does about that, and it contains the best description I have heard of what is actually being transferred when a battery company moves production between continents.
Three attempts at the same problem
CATL's first approach was the obvious one. Send locally hired staff to China for two or three months, have them work alongside colleagues there, bring them back to run the process.
That worked, up to a point. The point being that a great many things still came up that nobody knew how to handle.
So CATL changed tack and brought experts from China to run the lines in Germany. Their job was explicitly two jobs: keep production going, and teach local colleagues how to run the process and, more importantly, how to handle the abnormal case. What to do when something unexpected shows up. How to work through it together.
The numbers Shen gives are the interesting part. At the peak, 30 to 35% of the German workforce came from China. Two years later it is under 10%, and he expects it to fall further.
Why the documentation was not enough
The reason the first approach failed is the reason this matters beyond CATL.
Shen's distinction is between mechanical engineering and chemistry. Mechanical is physical. Chemistry, he says, is something like it's alive. A great many conditions each make a small difference to the product, and knowing which ones and by how much is not a thing you read.
His analogy: it's like cooking. You have all the recipes, and you cannot cook exactly the same food. You need to learn from people.
That is why sending people to watch it being done worked where sending documentation did not, and why the transfer took two years rather than two months. It also happens to be exactly the distinction Yann Vincent at ACC arrives at independently, calling battery production a mix of mass production and craftsmanship.
Three ways to build a plant
CATL now runs three structures in Europe at once, and Shen is clear it is not choosing between them.
The German and Hungarian plants are wholly owned by CATL. The Spanish one is a joint venture with Stellantis.
The joint venture logic runs in both directions. Stellantis is one of CATL's most important customers, so working together makes it easier to understand what the end customer, the driver, actually wants. And Stellantis knows how to run construction, permitting and approvals in Europe, which is not knowledge CATL had to start with.
The third model is licence, royalty and service. The partner owns 100% of the plant. CATL provides the technology and the support to make sure they can build the battery themselves.
Asked which model should be used more, Shen's answer is "even more" of all of them. Open to all kinds of possibility, as he puts it. The strategy overall is what he calls in Europe for Europe: develop here, produce here, sit close to the customer.
A battery built for European conditions
The most concrete engineering detail in the conversation is that CATL does not simply ship its Chinese product here.
Charging infrastructure in Europe is thinner, particularly very high power stations. So CATL's judgement is that charging speed above a certain level is already enough, and the effort goes elsewhere. Because of the same infrastructure gap, range needs to be a little longer. And European winters are colder than most of China, so low-temperature performance matters more.
The Shenxing Pro shown at the IAA is the result: fast charging that still works at minus twenty degrees.
Shen notes the innovation can travel back. North-east China has the same cold weather problem, so the same work has an application there. This is a quiet argument for building overseas that gets made less often than it should. New environments produce new problems, and solving them produces capability you did not have.
The residual value problem
The other market-specific constraint he raises is one that rarely comes up in technical discussions.
Around 60 to 65% of cars in Germany are leased. That makes second-hand values a sensitive input to whether someone buys an electric car at all, and buyers worry about what battery life does to the resale price.
CATL's response is being worked on with partners: extremely long-life cells, such that a car driven for three years still has a battery good for another ten. And a business model to match, where you lease the battery as well as the car.
On solid state, and on Europe
Shen separates two things that usually get discussed as one.
The scientific problems, he says, are largely solved, and that is a substantial change from a few years ago. Commercialisation and industrialisation still need time. CATL plans small-scope production in 2027 in China, fitted to some cars. Whether it comes to Europe depends on demand and on whether the technology is ready.
On whether Europe can build a competitive battery sector, his framing is that the challenges are shared and therefore fair. High energy costs. Finding workers who can do this job. And the fluctuation of regulation, which he returns to twice.
That last point is the one he presses. This industry needs enormous investment and a large number of skilled people. Both talent and money are smart, and both want to see a future before they commit. If someone can announce in five years that the direction has changed, neither shows up. His words: you need to have a bright future for them, otherwise the people and the money will not come.
He applies the same reasoning to competitors. These constraints hit CATL and every newcomer alike, so his suggestion is to work on them together rather than each company fighting alone. He says CATL is open to discussing common difficulties with competitors, and raises its hand with governments, universities and vocational training centres for the same reason. Being in Europe, he says, means wanting to be part of Europe.
What he tells other leaders
Two things stand out from the personal half of the conversation.
Asked how to support more leaders in the battery industry, his suggestion is not a training programme. Send them to the production plant for two weeks or a month, to see how a battery is actually made. The management topics, he says, a lot of people already know.
And on the pace of progress, he offers a personal measure. Twelve years ago he drove his first electric car in China. The range was 150 kilometres, which was not enough to support daily life. Today you can easily find 700, and even a thousand. There was a need, and there was a solution.
For someone whose company sits at the centre of an argument about industrial policy, it is a notably ordinary way to describe what changed.
This piece draws on the full conversation, which is available with a complete transcript on the episode page.