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The Apple Car Project Has Reportedly Stalled Due to Unreasonable Demands Put on Chinese Battery Suppliers CATL & BYD

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【Summary】Apple Inc’s secretive Apple Car project has hit another roadblock after talks with Chinese battery suppliers Contemporary Amperex Technology Co. Limited (CATL) and BYD have stalled, Reuters reported on Friday. The computer giant was in talks with both battery suppliers to supply the batteries for Apple’s electric car project, but the California company’s unreasonable demands on the two companies have caused negotiations to break down.

FutureCar Staff    Oct 22, 2021 2:35 PM PT
The Apple Car Project Has Reportedly Stalled Due to Unreasonable Demands Put on Chinese Battery Suppliers CATL & BYD

Apple Inc's secretive Apple Car project has hit another roadblock after talks with Chinese battery suppliers Contemporary Amperex Technology Co. Limited (CATL) and BYD have stalled, Reuters reported on Friday.

The computer giant was in talks with both battery suppliers to supply the batteries for Apple's electric car project, but the California company's unreasonable demands on the two companies have caused negotiations to break down.

Apple reportedly wanted either of the two companies to agree to set up teams that would only work with it exclusively, as well as build a battery plant in the U.S. that would build batteries only for Apple and not for any potential rivals, three people with knowledge of the discussions told Reuters.

CATL found it impossible to set up a separate product development team just for Apple due to difficulties in finding sufficient personnel, one source said to Reuters.

In a statement to Reuters, CATL said that it denied "the relevant information" about its discussions with Apple.

BYD, which produces iron-phosphate batteries at its plant in Lancaster, California that supplies batteries for its electric buses, also declined to build a new factory and put together a team that would solely focus on supplying Apple, said two of the sources.

CATL and BYD are two of the world's biggest producers of electric vehicle batteries. The companies informed Apple sometime in the past two months that they were not able to meet its strict requirements, the people said. However, Apple is still willing to resume talks with the two battery giants in the future, according to Reuters.

In the meantime, Apple is reportedly courting Japanese battery makers, including Tesla's battery partner Panasonic. Apple sent a group of people to Japan this month to try and work out a possible alternate battery supply deal.

Apple is reportedly looking to secure cobalt-free, lithium-iron phosphate (LFP) batteries for its Apple Car, which cost less to produce and are safer lithium ion batteries, which can catch fire if overheated. The tradeoff of using LFP batteries is that they have lower energy density, which reduces range.

Most automakers are currently using the more common nickel-cobalt-aluminum (NCA) or nickel-manganese-cobalt (NMC) batteries for electric vehicles because of their higher energy density, which delivers a longer range to EVs.

By switching to LFP batteries, automakers can make their EVs more affordable. 

In Feb 2020, CATL inked a two-year deal to supply batteries to Tesla. The lucrative deal with CATL followed months of negotiations, with Tesla Chief Executive Officer Elon Musk traveling to Shanghai to meet with CATL's Chairman Zeng.

Apple has been working on its secretive Apple Car project, dubbed "Project Titan" for at least five years. 

Apple recently met with Japanese and Asian suppliers, including South Korean companies LG Electronics and battery maker SK Group to supply the components. 

In July, LG Electronics finalized its new joint venture agreement with automotive supplier Magna International Inc. that will develop e-powertrains and other components for electric vehicles. The new joint venture company will be called "LG Magna e-Powertrain" and will be based in Incheon, South Korea. LG Magna e-Powertrain is linked to Apple's Project Titan.

Last year, South Korean automaker Kia made headlines around the world after reports that it was in talks with Apple Inc to build its electric, Apple-branded self-driving car. However, no agreement was reached.

In September, reports surfaced that Apple was meeting with executives at Toyota to mass produce its Apple Car. Whether or not those talks are ongoing remains unclear.


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