What Happens When a Chinese Battery Factory Comes to Town | WIREDSkip to main contentMenuSECURITYPOLITICSTHE BIG STORYBUSINESSSCIENCECULTUREREVIEWSMenuAccountAccountNewslettersSecurityPoliticsThe Big StoryBusinessScienceCultureReviewsChevronMoreExpandThe Big InterviewMagazineEventsWIRED InsiderWIRED ConsultingNewslettersPodcastsVideoMerchSearchSearchSign InSign InZeyi YangBusinessJan 22, 2026 3:15 PMWhat Happens When a Chinese Battery Factory Comes to TownChinese firms are building battery plants from Europe to North America, promising jobs while prompting local concerns about the environment, politics, and who really benefits.Photo-Illustration: WIRED Staff; Getty ImagesCommentLoaderSave StorySave this storyCommentLoaderSave StorySave this storyWhen the rest of WIRED subscribers get their hands on our next print magazine, you, dear readers of Made in China, can proudly say you heard about it here first. The issue is all about China and includes stories about robots, AI boyfriends, a Chinese town that became the crystal capital of the world, and a Chinese DNA database built for family reunions. Like this newsletter, the issue is our attempt to document how deeply Chinese technology now shapes everyday life—no matter where you live in the world.As part of the issue, I reported a story on how Chinese lithium battery companies like CATL, BYD, and Gotion are now building factories on nearly every continent. The trend challenges traditional narratives about “Made in China,” which often center on cheap labor, heavy pollution, and government subsidies. Instead, I set out to track every battery factory outside China owned by a Chinese company. With help from the New York–based think tank Rhodium Group, we identified 68 facilities that have been built or announced over the past decade.Entering a New PhaseThe worldwide expansion of Chinese battery factories signifies the country is entering a new phase of manufacturing. Chinese companies have become so efficient and technologically advanced that they can now relocate their factories anywhere and still find ways to be more competitive than local players. In WIRED’s China issue, we charted that unprecedented growth in a series of maps and graphs. You can check them all out here.The world is still grappling with what this paradigm shift will mean for the future of energy and geopolitics. But the batteries produced by these factories are already reshaping the transition to clean energy. The experts I spoke with said the growing presence of Chinese batteries—and the overseas factories that make them—could transform everything from local labor relations to how technology is transferred across borders.When a Chinese Factory Comes to TownHungary is one of the most striking examples of what happens when Chinese battery companies expand abroad. The country is home to at least four plants already under construction, including possibly the biggest overseas factory ever planned by a Chinese battery company that’s worth approximately $8.5 billion. Hungary has become a gateway for Chinese firms to sell their products to the European market. As a result, it also provides an early blueprint for how communities will react when a Chinese battery factory opens up shop in their backyard.Many people in Hungary are skeptical about whether Chinese companies will prioritize hiring locals or bring in cheaper workers from elsewhere instead. They arrived in the country at a time when local labor supply was low because many Hungarians moved to other parts of Europe in recent years in search of work, says András Bartók, an assistant professor at the Ludovika University of Public Service who has studied Hungary’s relationship with Japan and China. The companies have worked with the Hungarian government to bring in migrant labor from Central Asia and Southeast Asia, but that has prompted backlash from local residents. When CATL, the world’s largest lithium battery maker, laid off more than 100 employees at its planned Hungarian factory site last summer, the local municipality launched an investigation into whether the firm had kept its stated promise to hire locally.CATL is also facing local protests in Hungary over its water use and environmental footprint, criticisms that it inherited from Japanese and Korean battery companies that built factories there over the last two decades. “Way before these Chinese [investments] were announced, there were national-level protests with how groundwater is polluted during battery manufacturing,” says Bartók. A Hungarian court also ordered a Samsung battery plant to suspend production in October because of pollution concerns. Because the Chinese companies announced their investments in drought-prone regions, they were immediately swept into already heated media debates about the limited availability of natural resources.At the end of the day, local residents may feel disconnected from these batteries, and from the green energy transition they enable, because Hungarians are not the target consumers. Most lithium batteries produced in Hungary are destined for Western European car markets, where consumers are wealthier and already sold on the need to shift to clean energy. “The average Hungarian has the money to buy a 10-year-old used car from Germany, usually powered by diesel or gas. They don't have the money to buy electric vehicles,” says Bartók.Sluggish DemandIt’s worth keeping in mind that not all of the international deals announced by Chinese battery makers have panned out. Among the 68 factory investments we found, at least five of them have been paused or officially canceled, in some cases even after they had already begun construction. Part of that is because consumer adoption of EVs in these markets has proved to be a much more gradual process than in China.Chinese battery makers planned aggressive global expansions at a time when governments were giving generous subsidies to factory projects and tax credits to consumers who bought electric cars, and they now have to recalibrate as that enthusiasm wanes. In the US, the Inflation Reduction Act passed under Joe Biden incentivized both Chinese and American companies to build factories, but then the EV subsidies outlined in the legislation were canceled under President Donald Trump. Even Europe, which previously set a goal to cease gas car production entirely by 2035, is now having second thoughts.“Battery manufacturers, of course, would be less incentivized to make a big investment if they are not sure what the policy direction is,” says Alexander Brown, a senior analyst studying industrial policy at the Mercator Institute for China Studies.What if the world doesn’t want EVs? Some battery companies are already deploying a backup plan: pivot to energy storage. Ford, which is building a massive battery plant in Michigan using CATL’s manufacturing technology, announced in December that it would shift from making EV batteries to producing those for energy storage. Envision AESC, another major Chinese battery company whose plans to expand in the US were on pause for most of last year, also recently announced its existing plant in Tennessee will shift from making EV batteries to storage batteries.While some parts of the traditional car industry might be lobbying against EVs, everyone seems happy about having more batteries in grids and homes that can prevent power outages and even allow consumers to sell electricity back to the grid. (Well, at least almost everyone. The Pakistani national utility operator and the Chinese banks that lend money to it are not so happy about the rise of Chinese storage batteries, as another piece in our package expertly discussed.)The good news at least is that energy storage technology has seldom been politicized. In the US, both deeply Democratic California and Republican Texas have become heavy adopters of grid-level battery storage, so Chinese ambitions for building more factories will likely not go completely to waste.Reverse Technology TransferFor the partner companies and governments working with Chinese battery makers to bring factories to their countries, the goal has always been clear: exchange market access and subsidies for the promise that these firms will eventually train local workers to produce state-of-the-art batteries on their own.The irony here should not be lost on anyone who is paying attention to the global automotive industry. Over the last three decades, American, European, Japanese, and Korean automakers were happy to exchange their technological know-how for access to the Chinese auto market. But today, that relationship has been reversed.Ford CEO Jim Farley laid out this dynamic clearly in an interview with New York Times columnist Thomas Friedman last year: “The way we compete with them is to get access to their IP, just the way they needed ours 20 years ago, and then use our innovative ecosystem and American ingenuity and our great scale and our intimacy with the customer to beat them globally,” he explained.French President Emmanuel Macron doubled down on the same idea at the World Economic Forum this week, saying China is welcome to invest in Europe if it can “contribute to our growth, to transfer some technologies, and not just to export towards Europe.”This is the right approach, says Brian Engle, chairman of NAATBatt International, a US trade association for the battery industry. Engle used to be a gas car engineer, but he has now transitioned to researching battery safety. Just like the European countries, he predicts, the US is going to learn to “bring that revenue home, we're gonna enable these new technologies, we're gonna grow our economy.” At the moment, “the only long game we keep betting on is petroleum which, frankly, shows zero vision. This is a technology evolution that's not reversing,” Engle says.This is an edition of Zeyi Yang and Louise Matsakis’ Made in China newsletter. Read previous newsletters here.CommentsBack to topTriangleYou Might Also LikeIn your inbox: Maxwell Zeff's dispatch from the heart of AIThe best EVs coming in 2026Big Story: Your first humanoid coworker will be ChineseWhat to do if ICE invades your neighborhoodSpecial edition: You’re already living in the Chinese centuryZeyi Yang is a senior writer at WIRED, covering technology and business in China. He cowrites Made in China, a weekly newsletter that gives readers a clear-eyed, unbiased view of the biggest tech news coming out of the country. 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The burgeoning presence of Chinese battery factories across the globe, spearheaded by companies like CATL, BYD, and Gotion, represents a significant and evolving shift in the manufacturing landscape. As detailed by Zeyi Yang in his “Made in China” newsletter, this expansion signifies a new phase for China, moving beyond simply being a producer of cheap goods to that of a technologically advanced manufacturing powerhouse. This trend challenges traditional narratives surrounding “Made in China,” previously centered on low labor costs and considerable pollution. Instead, Chinese companies are now relocating factories worldwide, maintaining their competitive edge through technological advancements and operational efficiency.

The most striking example of this transformation is Hungary, which has become a critical gateway for Chinese battery firms to access the European market. The planned $8.5 billion factory, potentially the largest overseas facility by a Chinese battery company, highlights the scale of this expansion. However, this arrival has ignited local concerns regarding employment practices—particularly the reliance on migrant labor from Central Asia and Southeast Asia—and the potential impact on Hungarian workers, who had already been departing the country for work in other parts of Europe. CATL’s actions, including laying off over 100 employees and subsequent investigations, underscore these anxieties.

Beyond immediate labor concerns, the factories are also raising broader environmental considerations. Historically, concerns over pollution stemming from battery manufacturing, inherited from Japanese and Korean companies that previously operated in the region, are resurfacing with the Chinese operations. The Hungarian court’s order to suspend Samsung’s battery plant due to pollution concerns is a direct reflection of these issues. When considered in the context of drought-prone regions where these factories are located, the challenges become even more pronounced. Furthermore, the fact that the batteries produced in Hungary are primarily destined for Western European markets — where consumer demand for electric vehicles is already significant — blurs the lines of local impact, diverting attention from the immediate needs of the Hungarian population.

The broader implications extend to shifts in technology transfer and the dynamics of global competition. The reverse of the long-standing practice of Western automakers exchanging technological knowledge for access to the Chinese market is now taking place: Western firms are seeking access to Chinese innovations, particularly in battery technology. This trend has been succinctly summarized: “The way we compete with them is to get access to their IP, we're gonna enable these new technologies, we're gonna grow our economy.” This process is mirrored by French President Emmanuel Macron, who acknowledges China’s investment in Europe as a means of boosting growth and technological exchange.

However, this expansion isn't without its challenges. Several of the 68 factory investments announced by Chinese battery makers have been paused or canceled due to slower-than-anticipated EV adoption rates in key markets. Government subsidies and tax credits, which initially fueled enthusiasm, have waned, creating adjustments for the manufacturers. Looking ahead, companies are diversifying, pivoting towards energy storage solutions to capitalize on grid-scale battery deployment – a strategy embraced by Ford (shifting from EV batteries in Michigan) and Envision AESC (focusing on energy storage in Tennessee).

Despite these adjustments, the trend of Chinese battery production extends beyond the automotive sector, with implications for grid stability and the potential for decentralized electricity generation – a dynamic that even the Pakistani national utility operator and the banks that lend to it view with cautious concern through its rise of Chinese storage batteries. Ultimately, the rise of Chinese battery factories signifies a fundamental transformation in global manufacturing, driven by technological advancements and strategic geopolitical maneuvering. As Zeyi Yang concludes, "This is an edition of Zeyi Yang and Louise Matsakis' Made in China newsletter. Read Previous Newsletters Here. The good news at least is that energy storage technology has seldom been politicized.In the U.S., both deeply Democratic California and Republican Texas have become heavy adopters of grid-level battery storage, so Chinese ambitions for building more factories will likely not go completely to waste.”