CATL’s Debrecen, Hungary plant saw three sections halted after routine biological monitoring detected elevated nickel exposure in nine workers, prompting a temporary shutdown until safety deficiencies—particularly in protective equipment—are corrected.

Hungarian authorities cited deficiencies in providing protective gear and overall safety measures, prompting the suspension of operations as investigators assess the exposure incident.

CATL shares declined about 4% in Hong Kong after the halt raised concerns about the Debrecen project’s ramp-up and the plant’s commissioning timeline.

Analysts interpret new overseas regulatory guidelines as increasing uncertainty for Chinese battery and EV players pursuing international growth, potentially affecting funding and expansion plans.

The Debrecen project has a long-term plan to move toward cell production, following CATL’s 2022 announcement of a €7.34 billion investment to build a plant with 100 gigawatt-hours of annual capacity for cells and modules.

The regulatory developments have contributed to a sector-wide sell-off in lithium battery stocks listed in Hong Kong, with CATL and related equities under pressure.

CATL shares fell about 4.2% as part of a broader negative day for the sector and the company’s stocks.

The Hajdú-Bihar County Government ordered suspensions in three manufacturing areas—laser cutting of foils, electrode-foil winding, and cell drying—while allowing equipment testing to proceed.

CATL said the nickel exposure source is under investigation, ongoing equipment commissioning is paused, and stricter occupational-safety measures have been put in place.

China’s Ministry of Commerce and two other departments released guidelines tightening overseas competitive conduct and compliance standards for automobile-industry firms, signaling heightened oversight of international expansion by battery and EV companies.

The incident and regulatory developments contributed to a broader market reaction, with peers in CATL’s sector also posting modest declines.

Cell production had not yet started at the Debrecen facility, which remains in commissioning and trial-production prep, though modular battery production had begun at the site.