In a year of setbacks for the U.S. EV industry, capped by the loss of the clean vehicle tax credit , the decisions make economic and technological sense. CATL supplies nearly 40 percent of all EV batteries worldwide, making it the clear leader. Tesla, Mercedes-Benz, BMW, Volkswagen, and Toyota all partner with them. Ford and GM know they need to offer lower-cost EV options to the average consumer, so they turned to CATL for LFP batteries—a cheaper alternative to nickel-based lithium-ion cells. Though first developed in the U.S., American manufacturers no longer produce LFP for EVs, with production now dominated by China and CATL.

In August, Ford and General Motors made a telling choice concerning the future of affordable electric vehicles (EVs). For batteries to power their lower-cost vehicles, both automakers turned to a Chinese giant, Contemporary Amperex Technology Co., Limited (CATL). Ford will utilize its licensing agreement with CATL to manufacture lithium iron phosphate (LFP) batteries domestically. GM will source LFP batteries from CATL for the Chevy Bolt until 2027 “to stay competitive.”

In August, Ford and General Motors made a telling choice concerning the future of affordable electric vehicles (EVs). For batteries to power their lower-cost vehicles, both automakers turned to a Chinese giant, Contemporary Amperex Technology Co., Limited (CATL). Ford will utilize its licensing agreement with CATL to manufacture lithium iron phosphate (LFP) batteries domestically. GM will source LFP batteries from CATL for the Chevy Bolt until 2027 “to stay competitive.”

In a year of setbacks for the U.S. EV industry, capped by the loss of the clean vehicle tax credit, the decisions make economic and technological sense.