Tesla and Chinese battery maker CATL are reportedly looking into building an LFP battery plant in the US. According to media reports, the US carmaker discussed the matter with US politicians to see how the US Inflation Reduction Act (IRA) would apply.
Bloomberg first reported the story, citing people familiar with the talks. A potential location for the factory has yet to be finalised.
Tesla representatives met with the White House to know how and if the factory would be eligible for subsidies under the IRA. And if its EVs would be if they were fitted with CATL technology. Because under the law, EVs made with a certain amount of China-linked materials in their batteries do not qualify for tax credits.
The US Inflation Reduction Act also says that for EVs to be eligible for tax credits from 2027, 80 per cent of the market value of critical minerals used in the battery must come from the US or a country with who the latter has signed a free-trade agreement. So far, these agreements have been signed with Canada, Mexico and, most recently, Japan. And the US government is negotiating a similar deal with the EU.
Back to the possible battery plant: Ford recently announced a similar deal with CATL. The carmaker is setting up an LFP plant in the US state of Michigan. CATL will licence the technology to Ford and provide technical assistance. For reportedly said that CATL wouldn’t receive any US tax dollars from the deal, but it still sparked controversy on Capitol Hill.
The agreement between Tesla and CATL could look similar, with Tesla owning the plant and licensing the technology from China. If and when the deal will go through is still not clear.
Keyword: Tesla and CATL could build LFP plant in the US