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GM in talks with CATL to licence LFP battery tech, explore joint manufacturing

Picture for representation purpose only. Image: CATL

Chinese battery maker Contemporary Amperex Technology Co Ltd (CATL) is reportedly in discussions with US automaker General Motors for a deal that would licence the Chinese company's lithium-iron-phosphate (LFP) battery technology.

A deal, if it materializes, could be similar to CATL's agreement with Ford last year for the $3.5 billion LFP battery facility at the company's BlueOval Battery Park Michigan: CATL would build the production lines and handle supply chains and other equipment, while GM would front the capital expenditure.

The plans could also include a new joint GM-CATL North American plant to produce the new batteries. While details are are certain, the plant is likely to come up in the US or Mexico. 

GM has been struggling on the EV front. Software glitches and other delays have caused the company to miss its annual target. It also ran into trouble with Cruise, its autonomous driving unit -- California ordered the cars off the road, causing GM to shutter the division.

CEO Mary Barra is looking to get things back on track and has proclaimed 2024 to be "the year of execution" for GM. The company is ramping up production of its Ultium-based models, which use the company's modular automotive platform that can underpin a range of vehicles, from SUVs and crossovers and trucks. The company plans to build 200,000 to 300,000 Ultium EVs in 2024 – more than 20 times the number of Ultium vehicles sold last year.

For CATL, such license royalty service (LRS) models offer a chance to venture into North America at a lower investment, in turn reducing its capital at risk.

Robin Zeng, Chairman of CATL, had said earlier this month that the company was in talks with more than a dozen US and European automotive companies about licensing its technology.

The company has already signed an agreement with Stellantis for supply of LFP batteries for the Franco-Italian company's EVs.

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