SHANGHAI/HONG KONG — Apple is in early talks with China’s CATL and BYD about supplying batteries for its planned electric vehicle, four knowledgeable people said.
The discussions are subject to change and it is not clear whether an agreement will be reached with CATL or BYD, said the people who declined to be named because the discussions are private.
Apple has made building manufacturing facilities in the United States a precondition for potential battery suppliers, two sources said.
CATL, which supplies major automakers including Tesla, is reluctant to build a US factory because of political tensions between Washington and Beijing and because of cost considerations, the two people said.
It was not immediately clear whether Apple is also in talks with other battery makers.
Apple, which has not yet made a public announcement about its car plans, declined to comment. CATL, the world’s largest car battery manufacturer, and BYD, the world’s No. 4, also declined to comment.
Shares in BYD boosted gains after the news, up 5.4% in Hong Kong in late afternoon trading and closed 6.5% higher in Shenzhen. CATL reversed previous losses and ended up 0.5%.
Apple favors using lithium iron phosphate batteries that are cheaper to produce because they use iron instead of nickel and cobalt, which are more expensive, the four people said.
It has been working on self-driving technology and aims for passenger car production by 2024, Reuters reported in December.
People familiar with the matter have previously said that Apple’s planned EV could include its own groundbreaking battery technology. It was not immediately clear whether the discussions with CATL and BYD involved Apple’s own technology or designs.
The discussions come at a time when the US government wants to attract more EV production. US President Joe Biden’s proposed $1.7 trillion infrastructure plan includes a $174 billion budget to boost the domestic EV market that includes tax cuts and subsidies for battery manufacturers.
Many battery makers are ramping up production to meet rising global demand as automakers accelerate their move to electric vehicles to meet stricter emissions regulations aimed at tackling global warming.
Chinese battery makers are expected to grow at a faster pace than their foreign counterparts thanks to the continued expansion of the world’s largest EV market, SNE Research said in a June report.
Reuters reported last week that CATL plans to build a major new automotive battery plant in Shanghai, continuing a rapid expansion that will cement its leading position as the world’s No. 1 supplier. The plant would be close to Tesla’s Chinese manufacturing operations.