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GM Looks to Japan’s TDK to Make US Batteries with China Tech

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(Bloomberg) -- General Motors Co. is in discussions to buy electric vehicle batteries that would use technology from China’s Contemporary Amperex Technology Co. and be assembled at a new plant slated to be built in the US, according to people familiar with the matter.

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The factory would be funded and operated by TDK Corp., a Japanese company that makes components for consumer electronics, said the people, who asked not to be identified discussing information that’s private. The plant is expected to be located in the US South and may create more than 1,000 jobs, the people said.

Talks are ongoing and the deal could fall apart or change depending on the outcome of the US presidential election in November, the people added.

The discussions underscore how US automakers are contending with faltering EV demand and a push by Washington policymakers to build a domestic plug-in supply chain to reduce the industry’s reliance on China.

Under the terms of the deal, TDK would license technology from CATL — the world’s biggest maker of EV batteries — to make lithium iron phosphate cells, the people said, similar to existing CATL partnerships with Ford Motor Co. and Tesla Inc. GM doesn’t plan to take an equity stake in the venture, one person said.

Such a technology licensing arrangement may help avoid scrutiny by US lawmakers and the Biden administration, who are wary of collaboration with China on key strategic technologies including EV batteries. Last month, for example, Florida Senator Marco Rubio and Michigan Representative John Moolenaar, both Republicans, asked the Pentagon to put CATL on a restricted list of firms allegedly working with China’s military.

“Our EV strategy is focused on designing products that continue to lower cost, improve performance and localize production. Battery technology is a key enabler of that strategy,” GM said in a statement. The company declined to comment on “speculation.”

Representatives for TDK and CATL declined to comment.

GM’s shares rose 3.8% at 1:01 p.m. in New York. TDK’s US depositary receipts gained 3.3%.

Under the terms of the supply contract, GM and other automakers could buy LFP cells from the TDK plant at a fixed price over the life of a long-term contract, the people said.


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