SHANGHAI / HONG KONG (Reuters) – Apple Inc is in talks with China’s CATL and BYD over supplying batteries for its electric vehicle project, four people with knowledge of the matter said.
The talks are subject to change and it is not clear whether any deals with CATL or BYD will be made, said the people who declined to be named as the talks are private.
Apple has made building manufacturing facilities in the United States a condition for potential battery suppliers, two of the sources said.
CATL, which supplies major automakers including Tesla Inc, is reluctant to build a plant in the United States due to political tensions between Washington and Beijing as well as cost concerns, the two said.
It wasn’t immediately clear whether Apple is talking to other battery makers as well.
Apple, which has yet to make a public announcement on its car plans, declined to comment. CATL, the world’s largest auto battery maker, and BYD, the world’s number 4, also declined to comment.
The U.S. firm supports the use of lithium iron phosphate batteries which are cheaper to produce because they use iron instead of the more expensive nickel and cobalt, the four said.
Apple has been working on autonomous driving technology and has targeted 2024 for production of a passenger vehicle, Reuters reported in December.
People familiar with the matter have already said that Apple’s planned electric vehicle may include its own breakthrough battery technology. It wasn’t immediately clear whether the talks with CATL and BYD involved Apple’s technology or designs.
The talks come at a time when the US government is looking to attract more electric vehicle manufacturers. The $ 1.7 trillion infrastructure plan proposed by US President Joe Biden includes a $ 174 billion budget to boost the domestic electric vehicle market with tax credits and subsidies for battery makers, among other incentives.
Many battery makers are ramping up production to meet growing global demand, as automakers accelerate their switch to electric vehicles to comply with stricter emission rules aimed at tackling global warming.
Chinese battery makers are expected to grow at a faster rate than their overseas counterparts thanks to the continued expansion of the world’s largest electric vehicle market, SNE Research said in a June report.
Reuters announced last week that CATL is planning a major new auto battery plant in Shanghai, continuing a rapid pace of expansion that will solidify its lead as the world’s largest supplier. The plant is said to be close to Tesla’s manufacturing operations in China.
(Reporting by Zhang Yan in Shanghai and Julie Zhu in Hong Kong; Editing by Miyoung Kim and Edwina Gibbs)