General Motors (GM) is reportedly in talks with battery giant CATL to license its cheaper LFP battery technology. The plan could include building a new joint factory in North America to produce the new batteries.
Software glitches, cargo delays and other issues prevented GM from meeting its 2023 EV sales goals, which the company blames on “production hell.”
CEO Mary Barra claims 2024 will be the “year of execution” for the automaker to get back on track.
GM is ramping up production of Ultium-based models after “turning the corner” at its Detroit battery plant. GM plans to produce 300,000 of his Ultium EVs this year, up from 200,000, as several new Chevrolet EVs will be released this year, including the Blazer EV, Equinox EV, and Silverado EV.
This is about 20 times more than last year, when sales were less than 14,000 units. GM also plans to discontinue its best-selling Chevrolet Volt, at least in its current form.
Last year, 62,045 Chevrolet Bolts were sold, and electric vehicles accounted for more than 81% of GM's EV sales. Barra confirmed that GM will launch an Ultium-based Bolt EV next year.
It says it will offer “an even better driving, charging and ownership experience.” According to Barra, it will be the first Ultium EV in North America to be equipped with an LFP battery.
GM looks to CATL for inexpensive LFP battery technology
According to a new report from car news china, GM is in talks with CATL about licensing LFP battery technology. Plans also reportedly include building a joint North American factory to manufacture batteries.
Details are unclear, but the factory is likely to be located in the United States or Mexico. This would be similar to the agreement between CATL and rival Ford. Last February, Ford announced a $3.5 billion investment to build a new LFP plant at Blue Oval Battery Park in Michigan.
The plant is expected to begin producing LFP batteries to power Ford's next-generation electric vehicles in 2026. Ford has reached an agreement with CATL to license Ford's LFP battery technology. US automakers will build cells based on CATL's knowledge.
Under the contract with GM, CATL will be responsible for building production lines, supply chains and other equipment, while GM will be responsible for capital investments.
GM Chief Financial Officer Paul Jacobson said the new Bolt EV could save billions of dollars by using LFP batteries.
Both automakers are trying to circumvent federal regulations that require EV batteries to be produced in North America to qualify for tax credits.
Electrek's view
If true, the news could be significant. For example, Korean and Japanese battery manufacturers dominate the North American market, with LG, Samsung SDI, SK, and Panasonic controlling 80% of the market.
However, while China's CATL and BYD dominate the market, these battery manufacturers are largely missing out on the LFP battery opportunity. LFP batteries are cheaper to manufacture, which could give automakers an advantage in the future.
Several automakers, including Ford and GM, have announced plans to introduce more affordable EVs as demand for lower-cost electric vehicle options increases.
of late post CATL claims to have reduced the battery cost from 600 yuan ($83) per kWh for NCM batteries to 400 yuan ($55) per kWh. This could lead to significant savings as U.S. automakers seek to cut costs and make EVs profitable.
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