Ford is reportedly in talks with China’s CATL to provide batteries for EV production at the Oakville Assembly Complex.
According to sources close to the talks that spoke with the Financial Post, CATL is not likely to build a battery production facility in Ontario.
Instead, CATL would supply battery cells, and ship them to Oakville for installation.
However, the sources note that neither side expects to sign a deal in the near-term.
Concerns over the Biden’s administration’s Build Back Better legislation seems to be the most significant issue. The legislation includes a tax credit for American-made EVs that could change US-based automakers production plans in Canada.
China-based CATL is the world’s largest battery producer and currently supplies NIO, Xpeng, Volkswagen, BMW and Tesla.
However, CATL currently does not have any battery factories located in North America.
The company has multiple factories in China and one in Erfurt, Germany.
This would not be the first time Ford partnered with CATL. In fact, Ford China currently uses CATL batteries in domestically manufactured EVs for the Chinese market.
For Ford’s US-based operations, the company uses several battery suppliers, including SK Innovation and Panasonic.
Some experts believe that the Government of Canada may raise concerns over the potential partnership. The concerns relate to how the Chinese government uses its commanding market position to advance their own aims.
However, as per the same experts, the partnership would not raise national security concerns for Canada.
Neither CATL nor Ford commented on the talks or the potential deal between the two companies.