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Electric vehicles

General Motors to Purchase Electric Vehicle Batteries from Chinese Manufacturer

Strategic Insights

— 1 min read

General Motors has announced that it will purchase electric vehicle batteries from Chinese battery manufacturer Contemporary Amperex Technology Co., Ltd. (CATL) to support the production of its new electric vehicle model, the Chevrolet Bolt EV. The deal is crucial for GM's competitiveness in the affordable electric vehicle market, as it will allow the company to maintain its production levels until it can obtain batteries produced in the United States. The batteries chosen for the Chevrolet Bolt EV are lithium iron phosphate, which is more widely available and less expensive than batteries with higher nickel and cobalt content.

Key Takeaways:

  • General Motors will purchase electric vehicle batteries from Chinese manufacturer Contemporary Amperex Technology Co., Ltd. (CATL) to support the production of the Chevrolet Bolt EV.
  • The agreement is intended to maintain GM's competitiveness in the affordable electric vehicle market until the company can obtain batteries produced in the United States.
  • The Chevrolet Bolt EV will use lithium iron phosphate batteries, which are more widely available and less expensive than batteries with higher nickel and cobalt content.
  • CATL will supply the joint venture between General Motors and South Korea's LG to start producing lithium iron phosphate batteries in about two years.
  • The Chevrolet Bolt EV will start production at General Motors' Kansas City, Kansas, plant by the end of this year, exposing GM to import tariffs on batteries made by CATL.
  • General Motors' long-term strategy is to achieve localized supply of lithium iron phosphate batteries to balance costs and market competitiveness.
  • The company's net profit for fiscal year 2024 was $5.76 billion, a year-on-year decrease of 40.7%.
  • Due to the impact of tariffs, the company's net profit plummeted 35% in the second quarter of this year.

Statistics:

  • $5.76 billion: General Motors' net profit for fiscal year 2024 [1]
  • 40.7%: Year-on-year decrease of General Motors' net profit in fiscal year 2024 [1]
  • 35%: Net profit decrease of General Motors in the second quarter of this year due to tariffs [1]
  • 2 years: Timeframe for CATL to supply lithium iron phosphate batteries to the joint venture between General Motors and LG [2]

Sources:

  • Reference News Network, August 12, [1]
  • Spanish newspaper El Post, August 11, [2]

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