CATL and GM could build LFP battery factory in North America

General Motor’s new plant is said to be in the same realm as Ford’s LFP battery plant with CATL, which was initially designed for 35 GWh, but the annual capacity was later reduced to 20 GWh. Another parallel to the deal with Ford is that General Motors would own the factory alone and produce cells under a technology licence from CATL.

According to the Chinese publication Late Post, the GM plant will likely be located in the US or Mexico. However, apart from the statement on production capacity in relation to the Ford factory, no further details have been disclosed. Car News China speculates that the factory “will likely open around 2027.”

As with Ford, General Motors’ top management is apparently interested in access to cheaper LFP cells. For NMC cells, GM already founded the joint venture Ultium Cells with LG Energy Solution, which operates and is building several US battery factories. However, LFP cells are currently gaining acceptance for cheaper electric cars – cell chemistry that South Korean and Japanese cell manufacturers have largely ignored. The situation is different in China, where companies such as CATL and BYD (with its blade battery) are regarded as leaders in the LFP sector.

According to the Late Post, CATL has reduced the cost of LFP batteries to 400 yuan (or the equivalent of 55 dollars) per kilowatt-hour, while NMC cells still cost 600 yuan (83 dollars) per kWh. Extrapolated to a 50 kWh pack, this makes a difference of 1,400 dollars in purchasing alone.

Should the two companies conclude a licence agreement, it is likely the largest such agreement between CATL and a US company. Under the current subsidy conditions of the Inflation Reduction Act in the US, Chinese battery manufacturers such as CATL are effectively excluded from the US market because EVs with Chinese batteries are not eligible for subsidies.

As CATL CEO Robin Zeng recently stated in an interview with the Bloomberg news agency, the licence model has since developed into an important business segment. CATL supplies the factory equipment and the production technology and trains the staff. Still, the licence holder is the sole owner of the battery factory on paper – even if nothing works without CATL input. As CATL does not hold any shares in the factory, the company also has to invest significantly less, instead receiving income from the licence fees for patent usage and service fees.

Zeng stated in the interview that the company is in talks with around 10 to 20 other car manufacturers in the US and Europe about similar agreements. Tesla also wants to expand its battery production in Nevada with the help of CATL – for the stationary Megapack storage systems.

qq.com (in Chinese), cnevpost.com, carnewschina.com