Apple is in early-stage talks with China’s CATL and BYD about the supply of batteries for its planned electric vehicle, according to sources close to the discussions.
The discussions are subject to change and it is not clear if agreements with either CATL or BYD will be reached, said four people who spoke under the condition of anonymity to Reuters.
They declined to be named as the ongoing discussions between the companies are private.
Apple has made building manufacturing facilities in the United States a condition for potential battery suppliers, said two of the sources.
CATL, which supplies major carmakers including Tesla Inc, is reluctant to build a US factory due to political tensions between Washington and Beijing as well as cost concerns, the sources said.
It was not immediately clear if Apple is also talking to other battery makers.
Apple wants to use lithium batteries
Apple, which has yet to make a public announcement about its car plans, declined to comment.
CATL, the world’s biggest automotive battery maker, and BYD, the world’s No 4, also declined to comment.
Shares in BYD extended gains on the news to be up 5.4 per cent in Hong Kong in late afternoon trade and closing 6.5 per cent higher in Shenzhen. CATL reversed earlier losses to finish 0.5 per cent higher.
Apple is in favour of using lithium iron phosphate batteries that are cheaper to produce because they use iron instead of nickel and cobalt which are more expensive, the four people said.
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An Apple electric car by 2024?
It has been working on self-driving technology and has targeted 2024 for the production of a passenger vehicle, Reuters reported in December.
People familiar with the matter have previously said Apple’s planned EV could include its own breakthrough battery technology. It was not immediately clear if the discussions with CATL and BYD involved Apple’s own technology or designs.
The discussions come at a time when the US government is looking to attract more EV manufacturing.
US President Joe Biden’s proposed trillion-dollar infrastructure plan includes a $174 billion (€143 billion) budget to boost the domestic EV market with tax credits and grants for battery manufacturers, among other incentives.
Soaring demand for electric cars
Many battery makers are ramping up production to meet soaring worldwide demand as car makers accelerate their shift to electric vehicles to comply with tougher emission rules aimed at tackling global warming.
Chinese battery makers are expected to grow at a faster pace than their foreign peers thanks to further expansion of the world’s biggest EV market, SNE Research said in a June report.
Reuters reported last week that CATL is planning a major new automotive battery plant in Shanghai, continuing a blistering pace of expansion that will cement its lead as the world’s No 1 supplier.
The factory would be near Tesla’s China manufacturing operations.