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Honda. Motor Co Invests in Battery Maker CATL, Will Jointly Develop EV Batteries

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【Summary】Honda announced today it will buy a 1% stake in Chinese electric vehicle (EV) battery maker Contemporary Amperex Technology Ltd. (CATL). The two companies will jointly develop batteries for Honda's future EVs.

FutureCar Staff    Jul 10, 2020 1:00 PM PT
Honda. Motor Co Invests in Battery Maker CATL, Will Jointly Develop EV Batteries

Spurred by the popularity of Tesla's electric vehicles and the company's global lead in the EV segment, automakers around the world are scrambling to introduce their own fully-electric models. However in order to build hundreds of thousands of electric vehicles, automakers will require a steady supply of batteries, so they are forming partnerships with global battery makers. The latest comes from Japan's Honda Motor Co.

Honda announced today it will buy a 1% stake in Chinese electric vehicle (EV) battery maker Contemporary Amperex Technology Ltd. (CATL). The two companies said in a statement they will jointly develop batteries for Honda's future EVs.

CATL is a global leader in the development and manufacturing of lithium-ion power and energy storage batteries, with businesses covering R&D, manufacturing and sales of batteries for electric vehicles and energy storage systems. The company is headquartered in Ningde, China.  

The first Honda model equipped with a CATL battery is scheduled to be launched in the Chinese market in 2022. 

China is the world's biggest market for EVs.

"Honda is a key player in global electrification. Through this strategic cooperation, CATL and Honda will establish a stronger global partnership. We are working together to deliver more competitive products and solutions to global electrification, and to finally achieve a clean and pleasant style of mobility," said Zhou Jia, President of CATL.

Honda and CATL plan to expand their battery partnership globally in the future. The partnership may grow to include battery recycling and reuse in the future.

Honda has inked a number of new partnerships to make electric cars, including a joint venture with China's GAC under which the Japanese automaker began selling its first fully-electric EV in China, the Everus VE-1 SUV crossover introduced last year.

In North America, Honda is also working with U.S. automaker General Motors on the Origin, an electric & autonomous passenger shuttle for GM's autonomous driving division Cruise.

Most of the electric vehicle batteries in use today come from just a few global suppliers, including CATL, Panasonic, LG Chem and BYD. All of the respective companies are forming lucrative supply deals with automakers as demand for batteries increases. Panasonic, for example, has been Tesla's sole battery partner since the Model S was introduced in 2012. 

In 2018, CATL overtook Panasonic as the world's largest lithium-ion battery supplier. CATL is now supplying Tesla with batteries for its Model 3 sedans produced in China at Tesla's new Shanghai factory.

CATL also supplies batteries to Toyota and German automaker Volkswagen. CATL is building a battery plant in Germany in order to supply batteries to Germany's automakers, including BMW and Mercedes Benz. CATL is also considering expanding its battery manufacturing to North America, the company said.

CATL said its eyeing European expansion because it expects huge growth in the electric vehicle market there in response to the EU's strict CO2 requirements as part of the Paris Climate Agreement and the plans to ban diesel engine vehicles in some European cities.

In May, CATL said its ready to build an EV battery with an expected lifespan of 1.2 million miles or 16 years before its needs replacement. An EV battery with a million mile plus warranty could be a big selling point for automakers, luring new customers to switch to fully-electric vehicles that might last much longer than their fossil fuel counterparts.

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