Apple's talks with Chinese EV battery makers CATL and BYD mostly stalled - Reuters

• Apple’s talk with EV battery makers has stalled after the Chinese firms refused to set up teams and build U.S. plants 

• Apple is considering Japanese battery manufacturers, mainly Panasonic

Apple Inc’s talks with Chinese companies CATL and BYD for battery supply deals for its planned electric vehicle have been mostly stalled, Reuters reported on Friday, citing three people with knowledge of the discussions.

The battery makers informed Apple about two months ago that they could not meet its requirements and refused to set up teams and build U.S. plants that would solely cater to the tech giant, the report said.

However, one source told Reuters that the iPhone maker has not given up hope of resuming talks with either CATL or BYD.

Read More: Apple to sell fewer iPhones mostly due to global semiconductor crunch, J.P.Morgan says

The refusal

The report said CATL, the world’s top battery manufacturer for E.V.s, is reluctant to build a U.S. factory due to political tensions between Washington and Beijing along with cost concerns. Also, the firm found it impossible to set up a separate product development team that will exclusively work with Apple due to difficulties in finding sufficient personnel.

BYD, which has a battery plant in Lancaster, California, declined to build a new factory and team that would solely supply Apple, sources told Reuters.

Apple has been considering Japanese battery makers, mainly Panasonic Corp, and the tech giant has sent a team to Japan this month to consolidate the battery deal, the report said.

The setback

Reuters earlier reported Apple was planning to launch an electric car by 2024. However, the Cupertino tech giant has not publicly disclosed its plans.

In August, U.S. President Joe Biden signed executive order to adopt electric vehicles, aiming half of all new cars sold by 2030 be zero-emissions vehicles and propose new emission standards to cut pollution through 2026.

Read More: Biden to sign executive order aiming for 50% EVs by 2030

The setback in securing battery supplies could further hinder the development of electric vehicles for Apple, which last month lost the head of its car project, Doug Field, after he decided to return to Ford Motor Co.

The battery technology

CATL and BYD are more advanced than rivals in developing lithium iron phosphate (LFP) batteries, along with their own technology to improve the performance of LFP batteries. Without that, LFP batteries usually offer much shorter driving ranges and lower energy density than the more expensive lithium batteries that use cobalt and nickel.

Tesla Inc, which has been using LFP batteries from CATL in some of its cars manufactured in China, said it intended to use that battery chemistry outside China as well.

Picture Credit: Entrepreneur