Apple in Talks to Build an EV Battery Factory in the U.S. with Chinese Battery Makers, Reports Say

author: Eric Walz   

Computer giant Apple Inc. is apparently still working on its plans to build it's Apple-branded electric car, according to four people with knowledge of the matter that spoke to Reuters.

The people told Reuters that Apple is in early-stage talks with Chinese EV battery manufacturers Contemporary Amperex Technology Limited (CATL) and BYD to build a battery factory in the U.S. that could supply batteries to Apple for the secretive Apple Car project dubbed "Project Titan."  

It was not immediately clear if Apple is also talking to other battery makers. 

The sources said the discussions are subject to change and it is not clear if agreements with either CATL or BYD will be reached, who declined to be named as the discussions are private.

Apple is in favor of using lithium iron phosphate batteries which cost less to produce than batteries containing more expensive nickel and cobalt, the four people said.

CATL is one of the biggest suppliers of batteries to the auto industry. The company has already formed a strategic partnership with German automaker Volkswagen to supply the batteries for millions of EVs the automaker plans to build over the next decade. 

CATL also supplies batteries to Tesla for its vehicles built in Shanghai. The country is also the world's biggest auto market and like the rest of the world, there is a big push to develop electric vehicles.

But Apple has made building manufacturing facilities in the United States a condition for potential battery suppliers, said two of the sources, which was confirmed by a senior official in President Joe Biden's administration.

"My understanding is that Apple is talking about building advanced battery production factories here, here in the U.S.," Jared Bernstein, a senior White House economic adviser, told Reuters.

"That is completely consistent with what the president has talked about in terms of onshoring supply chains particularly in areas where we might grab global market share," he added.

President Biden wants to invest up to $174 billion in electric cars and related technology as part of a much larger infrastructure and jobs plan. Biden's American Jobs Plan includes significant investments in electric vehicle production as a way to fight climate change and position the U.S. as a global leader in the development of green technologies such as battery-powered cars. It also includes bigger EV tax credits and grants for battery manufacturers.

However, according to people that spoke with Reuters, CATL is reluctant to build a U.S. factory due to political tensions between Washington and Beijing as well as cost concerns.

Automakers with EV Plans are Forming Battery Partnerships

The world's automakers are entering into supply deals with battery makers to ensure they have the batteries needed to ramp up production of EVs over the next decade. If in fact Apple wants to build an electric car, it will need a battery partner, which is what U.S. automakers General Motors and Ford have already done.

Last month, Ford Motor Co and South Korea-based SK Innovation announced the signing of a memorandum of understanding (MoU) to create a joint venture EV battery company called "BlueOvalSK" to produce approximately 60 GWh annually in battery cells and array modules. Battery production is scheduled to begin by mid-decade, with potential to expand as Ford introduces new electric models.

In Dec 2019, Ford's rival General Motors announced a joint venture battery company Ultium Cells LLC with South Korean battery maker LG Chem to mass-produce battery cells in Ohio for GM's future battery-electric vehicles. 

GM has since expanded its plans as it commits to investing billions to develop new electric models. 

In April, Ultium Cells LLC announced a second $2.3 billion plus investment to build another EV battery cell manufacturing plant in Spring Hill, Tennessee where the automaker has had a presence since 1990 when its opened its Spring Hill Manufacturing plant. The plant is the largest GM facility in North America.

Apple's ramped up efforts to secure a battery partner means that its electric car plans are moving forward.

In January, reports surfaced that Apple was in talks with automaker Hyundai Motor Co to build its electric car, but those discussions ended in February. The car was reportedly to be built by Hyundai's Kia brand. 

Bloomberg reported in February that Apple was in talks with multiple lidar developers to supply the sensors for its car project. Lidar sensors are used for perception systems for self-driving vehicles. It has been working on self-driving technology and has targeted 2024 for the production of a passenger vehicle. 

Bloomberg also reported that Apple had assembled a team of hardware engineers to develop electric drive systems, external body designs, and an interior for Apple's electric vehicle. 

In early April, the Korean Times reported that Apple was very near to inking a deal with contract manufacturer Magna International to build its futuristic Apple Car. 

"LG Magna e-Powertrain is very near to signing contracts with Apple under which they could handle the initial volume production of Apple EVs. Contract details are still being discussed," a source familiar with the talks told The Korea Times.

People familiar with the matter have previously said Apple's planned EV could include its own breakthrough battery technology. It was not immediately clear if the discussions with CATL and BYD involved Apple's own technology or designs.

Last year, 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.

Many battery makers are ramping up production to meet soaring worldwide demand as car makers accelerate their shift to electric vehicles to comply with tougher emission rules aimed at fighting climate change. 

CATL predicted in late 2019 that demand for its batteries could soar by roughly 50% in the coming years.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.