Apple in discussion with China’s major automotive battery makers

Apple Inc, the world's largest technology company is said to be in early talks with China's major automotive battery maker, CATL and BYD for the supply of batteries for its planned electric vehicle plant in the United States according to a recent Reuters report.

It is not clear if agreements with either CATL and BYD will be reached but they may change. Apple has made building a manufacturing facility in the United States, a condition, for the potential battery suppliers. The US President, Joe Biden's administration has confirmed this condition last week.

"My understanding is that Apple is talking about building advanced battery production factories here, here in the U.S.," Jared Bernstein, a senior White House economic adviser, told Reuters.

"That is completely consistent with what the president has talked about in terms of onshoring supply chains particularly in areas where we might grab global market share," he said.

The report added, that Apple is in favor of using lithium iron phosphate batteries that are cheaper to produce as they use iron in place of nickel and cobalt which is more expensive.

CATL which supplies EV batteries to major automakers including Tesla is said to be reluctant about building a factory in the US given the political tensions between the United States and China, and the cost factor involved.

The discussions between Apple and China's top automotive battery makers have come at a time the US government is looking to attract more EV manufacturing.

Earlier this year, Biden proposed $1.7 trillion ambitious infrastructure plan which includes a $174 billion budget to boost domestic supply chains for the electric vehicles market with tax credits and grants for battery manufacturers, among other incentives. These plans are aimed at making US automakers competitive globally and to win a larger share of the EV market.