GM Eyes US-Made Chinese Batteries In Deal With Japan's TDK: Report

General Motors Company GM shares are trading higher after the firm agreed to explore collaboration with Hyundai Motor and expand its partnership with EVgo by installing 400 fast-charging stalls at key locations in major U.S. metropolitan areas.

Additionally, the company is reportedly in talks to buy Chinese batteries made in the U.S. through its partnership with Japan’s TDK.

The company is negotiating to acquire electric vehicle batteries utilizing technology from China’s Contemporary Amperex Technology Co., with plans to be assembled at a new plant expected to be built in the U.S., reported Bloomberg, citing people familiar with discussions.

The factory would be funded and managed by TDK Corp., a Japanese firm specializing in components for consumer electronics. The factory is expected to be situated in the U.S. South and may produce over 1,000 jobs.

Also Read: Trump Wants To End EV Tax Credits But Yellen Warns of Higher Bills, Lost Jobs, and China’s Gain

Discussions are still underway, and the deal may fall through or be altered depending on the results of the U.S. presidential election in November.

These talks highlight the challenges U.S. automakers face with declining EV demand and the drive by Washington policymakers to establish a domestic supply chain for plug-in vehicles to lessen the industry’s dependence on China, Bloomberg added.

Under the deal, TDK would obtain a license from battery manufacturer CATL to produce lithium iron phosphate cells, similar to CATL’s existing agreements with Ford Motor and Tesla Inc., the report noted. GM does not intend to acquire an equity stake in the venture.

This technology licensing arrangement could help circumvent scrutiny from U.S. lawmakers and the Biden administration, who are cautious about partnerships with China on critical technologies like EV batteries.

For instance, last month, Florida Senator Marco Rubio and Michigan Representative John Moolenaar, both Republicans, urged the Pentagon to add CATL to a restricted list due to concerns about its alleged ties with China’s military.

“Our EV strategy is focused on designing products that continue to lower cost, improve performance and localize production. Battery technology is a key enabler of that strategy,” GM said in a statement to Bloomberg.

Price Action: GM shares are trading higher by 3.82% to $46.38 at last check Thursday.

Image via Shutterstock

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