GM could use batteries made in China

The Detroit automaker has not yet commented on the report but said battery technology is critical to reducing the cost of electric vehicles.

General Motors is exploring the possibility of sourcing electric vehicle batteries using technology from China’s Contemporary Amperex Technology Co Ltd, or CATL, the world’s largest producer of electric vehicle batteries. However, the batteries may not be made in China but at a new plant in the United States, which could mitigate geopolitical risks and increase local production capacity.

GM may get the batteries from a plant operated by Japan’s TDK Corp. The plant, which is likely to be built in the southern United States, is expected to create more than 1,000 new jobs and boost the local economy, according to the people, who asked not to be identified because the information is private.

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According to Bloomberg, under the arrangement, TDK will license CATL’s technology to produce lithium iron phosphate batteries. Although Ford has pledged to invest $3.5 billion in a battery plant in Michigan that uses CATL technology, GM plans not to participate in an equity investment in the joint venture. This strategy may help GM avoid potential scrutiny from U.S. lawmakers on foreign investment in key technologies.

By signing a supply contract, GM can obtain LFP batteries from TDK at a fixed price during the long-term agreement. This approach not only saves GM from paying large upfront costs, but also protects it from battery price fluctuations. In addition, it can provide a degree of stability in a turbulent political environment, as potential changes to the Inflation Reduction Act may affect future investments.

Many details of the plan remain unconfirmed and could change depending on the outcome of the upcoming November presidential election. GM declined to comment on the report but said its “electric vehicle strategy is focused on designing products that continue to reduce cost, improve performance and localize production. Battery technology is a key enabler of this strategy.”

Interestingly, CATL, founded in 2011 by Zeng Yuqun, has close ties to Japan’s TDK. Zeng founded New Energy Technology Co., Ltd. (ATL) in 1999, which was acquired by TDK in 2005. Zeng then worked as a manager at TDK, and his early career was directly tied to the Japanese company’s technological advances in the battery sector.