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Apple Inc (AAPL.O) has had early-stage talks with CATL (300750.SZ) and China’s BYD (002594.SZ) about supplying batteries for its planned electric car, four people familiar with the matter said.
The people, who declined to be named because the discussions are private, said discussions are subject to change and it is not clear whether agreements will be reached with CATL or BYD.
Two sources said Apple has made building manufacturing facilities in the United States a requirement for potential battery suppliers.
The two officials said Cattell, which supplies major automakers including Tesla Inc (TSLA.O), is reluctant to build a US plant due to political tensions between Washington and Beijing as well as cost concerns.
It was not immediately clear if Apple was also talking to other battery makers.
Apple, which has not yet made a public announcement of its car plans, declined to comment. CATL, the world’s largest car battery maker, and BYD, No. 4 in the world, also declined to comment.
Shares in BYD extended gains after the news to reach 5.4% in Hong Kong in the late afternoon to close 6.5% higher in Shenzhen. CATL reversed its previous losses to end 0.5% higher.
The four people said that Apple prefers to use less expensive lithium iron phosphate batteries because they use iron rather than nickel and cobalt, which are more expensive.
Reuters reported in December that the company was working on self-driving technology and was targeting 2024 to produce a passenger car. Read more
People familiar with the matter previously said that Apple’s plans for an electric vehicle may include its own battery technology. It was not immediately clear whether discussions with CATL and BYD included Apple’s own technology or designs.
The discussions come at a time when the US government is looking to attract more electric vehicle manufacturing. US President Joe Biden’s $1.7 trillion infrastructure plan includes a $174 billion budget to boost the domestic electric car market through tax credits and grants to battery manufacturers, among other incentives. Read more
Several battery makers are ramping up production to meet rising global demand as automakers speed up their switch to electric vehicles to comply with stricter emissions rules aimed at tackling global warming.
Chinese battery makers are expected to grow faster than their foreign counterparts thanks to the further expansion of the world’s largest electric vehicle market, SNE Research said in a June report.
Reuters reported last week that CATL plans to set up a major new auto battery factory in Shanghai, continuing a sharp pace of expansion that will cement its leadership as the world’s No. 1 supplier. The plant was near Tesla’s China manufacturing operations. Read more
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