The discussions are subject to change and it is not clear if
agreements with either CATL or BYD will be reached, said the people who
declined to be named as the discussions are private.
Apple has made building manufacturing facilities in the
United States a condition for potential battery suppliers, said two of the
sources.
CATL, which supplies major car makers including Tesla, is
reluctant to build a US factory due to political tensions between Washington
and Beijing as well as cost concerns, the two people said.
It was not immediately clear if Apple is also talking to
other battery makers.
Apple, which has yet to make a public announcement about its
car plans, declined to comment. CATL, the world's biggest automotive battery
maker, and BYD, the world's No. 4, also declined to comment.
Shares in BYD extended gains on the news to be up 5.4
percent in Hong Kong in late afternoon trade and closing 6.5 percent higher in
Shenzhen. CATL reversed earlier losses to finish 0.5 percent higher.
Apple is in favour of using lithium iron phosphate batteries
that are cheaper to produce because they use iron instead of nickel and cobalt
which are more expensive, the four people said.
It has been working on self-driving technology and has
targeted 2024 for the production of a passenger vehicle, Reuters reported in
December.
People familiar with the matter have previously said Apple's
planned EV could include its own breakthrough battery technology. It was not
immediately clear if the discussions with CATL and BYD involved Apple's own
technology or designs.
The discussions come at a time when the US government is
looking to attract more EV manufacturing. US President Joe Biden's proposed
$1.7 trillion infrastructure plan includes a $174 billion budget to boost the
domestic EV market with tax credits and grants for battery manufacturers, among
other incentives.
Many battery makers are ramping up production to meet
soaring worldwide demand as car makers accelerate their shift to electric
vehicles to comply with tougher emission rules aimed at tackling global
warming.
Chinese battery makers are expected to grow at a faster pace
than their foreign peers thanks to further expansion of the world's biggest EV
market, SNE Research said in a June report.
Reuters reported last week that CATL is planning a major new
automotive battery plant in Shanghai, continuing a blistering pace of expansion
that will cement its lead as the world's No.1 supplier. The factory would near
Tesla's China manufacturing operations.
© Reuters
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