Contemporary Amperex Technology (CATL), the world’s largest electric vehicle battery maker, is in talks to offer automakers steeply discounted prices in exchange for sourcing the vast bulk of their power cells from the company in a bid to stave off growing competition from smaller rivals, reports Nikkei Asia.
According to a source close to the situation, if the plan goes ahead, CATL will sell the strategic clients EV batteries made from self-manufactured lithium carbonate at a low price. In return, they will be required to sign a contract committing them to buy 80% of their EV batteries from CATL over the next three years. The names of automakers participating in the talks were not given.
The person providing the information did not disclose how low the price will be but said it will lead to a significant drop in the carmakers’ battery procurement costs because it will be set based on the production cost of CATL’s self-made lithium carbonate that is estimated to be up to RMB 200,000 ($29,100) a ton, far below market prices.