TMTPost --  Contemporary Amperex Technology Co. Ltd. (CATL) is seeking further expansion in the United States, according to head of the top battery manufacturer for electric vehicles (EVs)  in the world.

Credit：CATL

CATL is talking with Tesla Inc. and other automakers to license it battery technologies in the United States, Robin Zeng Yuqun, founder and chairman the Chinese vehicle battery giant told the Wall Street Journal.  In his interview with the U.S. newspaper, Zeng said the scale of cooperation and other details about what Tesla would license from CATL are still being discussed. The 56-year old leader expressed optimism about partnership with foreign auto players. He said CATL’s technologies were unlikely to be embroiled in a wider tech war as governments across the globe are focused on combating climate change. CATL’s existing partnership with Ford will be the model for similar cooperation with other American carmakers, Zeng said.

Tesla is joining forces with CATL to develop faster-charging batteries, which would be power an EV priced at less than US$25,000, Zeng said in a separate interview with Bloomberg. Zeng also confirmed his company is supplying machinery to Tesla’s plant in Nevada. Tesla was reported in February that to plan to expand battery production in Nevada, opening a small facility using idle equipment from CATL.

Zeng’s remarks suggested CATL has sought solutions to mitigate impact of the Inflation Reduction Act (IRA), which was passed by U.S. Congress in August 2022.One goal of the act was to encourage the development of electric vehicles in the United States. Under the bill, the U.S. government offers a tax credit of up to $7,500 to vehicles meeting various localized production conditions. Introduction of IRA has increased the uncertainty of CATL and other Chinese battery companies’ expansion in U.S. as the law proposes the proportion of battery components, including positive and negatiitdve battery materials, electrolytes, produced locally in North America should reach 50% before 2024, and 60% in 2024. The proportion will increase year by year thereafter, reaching 100% by 2029. The bill also proposes that the proportion of key mineral raw materials, including lithium, nickel, cobalt, manganese, etc., locally mined and processed in North America should reach 40% before 2024, 50% in 2024, and 80% by 2027. These requirements are not without discrimination, and Chinese companies may be regarded as “sensitive entities” and excluded. Thus, CATL and its domestic peers have to change its strategies in the U.S market.

Ford announced in February 2023 that it will invest $3.5 billion to build a lithium iron phosphate cells (LFP) factory in Michigan. This is the largest investment for a U.S. automaker to tap into the cheaper battery cell chemistry as LFP costs less than the nickel-and-cobalt combination widely used in North America and Europe. The factory, located in Marshall, a town about 100 miles west of Detroit, is expected to create about 2,500 jobs and open in 2026, with annual battery capacity to empower 400,000 electric vehicles (EVs).

Calling the plant a wholly-owned subsidiary, Ford said CATL will serve as its partner that provides technology and expertise. Ford executives said all the operations of the plant will be under control of the company and CALT employees will be stationed there. CATL later confirmed it has accepted invitation for cooperation from Ford. The Chinese EV battery giant would license CTP (cell to pack) technology to Ford and its workers shall help the new plant from construction to operation.

Ford was reported last September that it halted construction of its plant in Marshall, Michigan as several House committees launched investigations into CATL and Ford’s cooperation and the project, arguing it would enable Chinese domination of the U.S. auto industry. A Ford spokesperson later confirmed the U.S. auto giant paused work and limited spending on construction on the Marshall project “until we’re confident about our ability to competitively operate the plant”.