Toyota will partner with China’s CATL, the world’s largest automotive battery maker to diversify its supply of crucial components in a push to accelerate the electrification of its products.
The Japanese automaker will sign a memorandum of understanding (MoU) on a “strategic partnership” with Contemporary Amperex Technology Ltd (CATL), which is expected to supply lithium-ion batteries for Toyota-branded electric vehicles to be released in China and other markets starting from next year.
Toyota had set the goal of more than tripling its annual sales of electrified vehicles from 2018 to at least 5.5 million by 2030, accounting for half of its total sales. Hybrids and plug-in hybrids will account for 4.5 million of these while fuel-cell and full-electric vehicles will make up the rest. Toyota now aims to achieve this goal as early as 2025 by tapping CATL’s manufacturing capacity.
CATL led the global market for automotive batteries in 2017 with a roughly 16% share. Chinese government incentives for domestic automakers to use batteries from local manufacturers have helped drive CATL’s sales, letting it expand production and improve its cost competitiveness.
The company has forged relationships with other automakers, including a partnership with Honda Motor to jointly develop batteries and an agreement with Nissan Motor to supply batteries for an electric car that debuted last year. BMW and Volkswagen use CATL batteries as well.
Toyota’s rush to accelerate its electric-vehicle plans comes amid a shift in that direction by rival automakers as well as tightening environmental regulations in major markets. While the company lags behind European and Chinese rivals in electric vehicles, it hopes to catch up with CATL’s help.
From Nikkei Asia Review