GM in Talks to Build U.S.-Based Battery Plant with Chinese Tech Amid Growing EV Competition

General Motors (GM) is in advanced talks to source electric vehicle (EV) batteries that incorporate technology from China’s Contemporary Amperex Technology Co. Limited (CATL), with plans to assemble them in a new U.S.-based plant. According to a source familiar with the matter, the potential plant, which would be funded and operated by Japan’s TDK Corp, could create over 1,000 jobs in the southern U.S. and help GM lower battery production costs for its EVs.

The proposed deal, first reported by Bloomberg, would see GM follow in the footsteps of its rival Ford Motor Company, which in February 2023 announced a partnership to license CATL’s technology for its Michigan-based battery plant. Ford’s decision to use CATL’s lithium-iron-phosphate (LFP) batteries has sparked political debate, with U.S. lawmakers, including Intelligence Committee vice-chair Senator Marco Rubio, voicing concerns over reliance on Chinese tech in the EV race.

Lower Costs, Avoiding Tariffs

By assembling the batteries in the U.S., GM aims to dodge new tariffs imposed under the Inflation Reduction Act, which incentivizes domestic EV production. The use of CATL’s technology is expected to help GM produce lower-cost batteries, a critical factor as automakers race to meet growing global demand for EVs while navigating capital-intensive shifts toward clean energy vehicles.

EV production costs have soared for automakers as they build new battery plants and comply with strict environmental regulations. This move could ease GM’s capital burden while advancing its goal of scaling up EV production to compete with rivals globally.

Competitive Landscape and Concerns

While Ford’s battery deal with CATL has already sparked political scrutiny, industry insiders suggest that other automakers like GM are likely to follow suit to remain competitive in the evolving EV landscape. “If Ford is allowed to move ahead with its CATL collaboration, other automakers will likely do the same to cut costs,” said an industry official.

In parallel to the CATL talks, GM is also exploring further collaboration with Hyundai Motor on joint vehicle development and supply chain strategies, emphasizing the global industry’s shift toward strategic alliances to tackle EV challenges.

As talks continue and details remain under negotiation, the potential deal could signal another step forward for GM as it strives to lead in the U.S. EV market while balancing national security concerns over Chinese technology integration.

Thomas Lin
Financial Desk