Apple’s goal is to launch a car in 2024, which makes building a manufacturing facility in the United States a condition: Reuters.
Four people familiar with the matter said that Apple is in early negotiations with China’s CATL and BYD on the supply of batteries for its planned electric vehicles.
People familiar with the matter said that the discussion may change, and it is not clear whether an agreement will be reached with CATL or BYD because the discussion is conducted in private and therefore declined to be named.
Two sources said that Apple has established a manufacturing plant in the United States as a condition for potential battery suppliers.
Two people familiar with the matter said that the CATL, which supplies major automakers including Tesla, is reluctant to build plants in the United States due to political tensions between Washington and Beijing and cost issues.
It is unclear whether Apple is also negotiating with other battery manufacturers.
Apple, which has not publicly announced its car plans, declined to comment. Ningde Times, the world’s largest car battery manufacturer, and BYD, the world’s number four manufacturer, also declined to comment.
BYD’s share price expanded on the news, rising 5.4% in Hong Kong in late afternoon trading, and closing 6.5% in Shenzhen. The Ningde era reversed its earlier decline and closed 0.5% higher.
The four people familiar with the matter said that Apple is in favor of using lower production cost lithium iron phosphate batteries because they use iron instead of the more expensive nickel and cobalt.
According to a Reuters report in December, the company has been studying autonomous driving technology and plans to produce passenger cars in 2024.
People familiar with the matter have previously stated that Apple’s planned electric vehicles may include its own breakthrough battery technology. It is not clear whether the discussions with CATL and BYD involve Apple’s own technology or design.
The discussion took place at a time when the US government wanted to attract more electric car 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 through incentives such as tax credits and grants to battery manufacturers.
As automakers accelerate their shift to electric vehicles to comply with stricter emission regulations designed to combat global warming, many battery manufacturers are increasing production to meet growing global demand.
SNE Research said in a June report that due to the further expansion of the world’s largest electric vehicle market, it is expected that Chinese battery manufacturers will grow faster than their foreign counterparts.
Reuters reported last week that CATL is planning to build a large-scale automotive battery factory in Shanghai to continue its rapid expansion and consolidate its leading position as the world’s number one supplier. The plant will be close to Tesla’s manufacturing operations in China.