This Tesla Supplier Pulls Brakes On US, Mexico EV Battery Investment

  • Chinese battery giant Contemporary Amperex Technology Co Limited eased down on its battery plant investment in North America in late August. 
  • The popular Tesla Inc TSLA supplier is concerned that new U.S. rules on sourcing battery materials known as the Inflation Reduction Act (IRA) will drive higher costs, Reuters reported.
  • The largest battery maker, which supplies one of every three electric vehicles, has explored opening new plants in the U.S. and Mexico since early 2022.
  • Also Read: CATL's 3rd Largest Customer After Tesla, Nio Cuts Reliance On Battery Giant In Bid For Diversification
  • The planned investment in northern Mexico, South Carolina, or Kentucky would be part of an expansion for CATL beyond China, where it controls almost half of the battery market and serve significant automakers, including Ford Motor Co F and Bayerische Motoren Werke AG BMWYY.
  • The IRA requires automakers to have 50% of critical minerals used in EV batteries sourced from North America or U.S. allies by 2024, rising to 80% by the end of 2026.
  • The rules would hike the costs of manufacturing batteries in the U.S. to a level higher than shipping them from China, even if the U.S. government offers subsidies for CATL to build the plants.
  • In June, CATL launched an electric-car battery with a range of over 1,000 kilometers (620 miles) on a single charge.
  • CATL claimed that the battery was 13% more potent than Tesla's 4680 battery to be made by Panasonic Holdings Corp PCRFY.
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