CATL extends a hand to Trump and here's why it would suit Musk

Will the new US President open up to the Chinese? Maybe so

Photo by: Shutterstock

By: Eleonora Lilli

Nov 14, 2024 at 5:32am ET

Comment

The first Chinese company to make statements on the new political course in the US is CATL. The company's founder and president, Robin Zeng, told Reuters that he would consider opening a plant in the US if President-elect Donald Trump gives the green light to Chinese investment in the electric vehicle supply chain.

And Trump's reaction is not a foregone conclusion. Chinese electric vehicle and battery companies have so far been opposed by the US administration, which is concerned about competition and also national security (think of the ban on Chinese hardware and software in US-made cars that was being worked on under Biden). And it is not just about democratic ideas, quite the contrary.

A Republican bill (even opposed by President Biden's White House) would like to limit incentives for the purchase of electric vehicles powered by Chinese battery technology licensed to American companies such as Ford and Tesla.

Trump, who wants to continue to prevent Chinese car imports into the US (there are currently 100 per cent tariffs), has however said he is open to the possibility of Chinese automakers building vehicles in the US. "We will give incentives and if China and other countries want to come here and sell cars, they will build plants here and hire our workers," he told Reuters a few months ago.

CATL's proposal

Chinese manufacturers of electric cars and batteries have been excluded from the US market through protectionist trade measures supported by both Democrats and Republicans. Trump himself, in his first term, launched a wider trade war with China. 'Originally, when we wanted to invest in the US, the US government said no,' Zeng recalled in the interview, stating however that as far as he is concerned he is 'really open-minded'.

As the news agency recalls, CATL is only present in the US through licensing agreements for battery production. One is with Ford, which is opening a plant in Michigan to build low-cost lithium-phosphate batteries for the Mustang Mach-E and the Ford F-150 Lightning. The other agreement is with Tesla.

The relationship between CATL and Tesla

CATL is a major supplier to Tesla's factory in Shanghai, China, Tesla's largest and most profitable factory. For the US, the two companies have entered into a collaboration agreement to produce batteries in Nevada, but there are no firm dates on when work will begin. Well-informed but anonymous people told Reuters it should start in 2025.

Tell us what you think!

View

Comments

In April, Zeng met with Musk in Beijing and in the latter interview said the Tesla licensing deal would allow CEO Elon Musk to focus his capital investment on artificial intelligence and autonomous vehicles.

The chairman of the Chinese company shares Musk's vision on these goals and thinks it is a win-win that Tesla's autonomous driving technology is based solely on cameras and artificial intelligence.

He disagrees, however, on the cylindrical battery, known as 4680. "It will fail and never succeed," said Zeng, who claims to have had a lengthy conversation with Musk on the subject. "He has remained silent. He doesn't know how to make a battery. It's about electrochemistry. He is good at chips, software, hardware, mechanical things...'. So we will see whether CATL will really produce its batteries directly on US soil.