Honda And CATL Form Comprehensive Strategic EV Battery Alliance

Honda has acquired approximately 1% of CATL shares and intends to launch its first CATL-powered EV in 2022.

Honda and Contemporary Amperex Technology Co. (CATL) jointly announced today a comprehensive strategic alliance on batteries for New Energy Vehicles – “mainly for battery electric vehicles.”

The deal includes several points, starting with Honda’s acquisition of about 1% of CATL shares.

The one-way capital alliance opens the way for a deeper partnership in:

Brief info from the press release:

“By bringing together the two companies’ individual technology advantages, CATL and Honda will conduct joint development on NEVs batteries and joint R&D into fundamental technologies, aiming for their future application. CATL will provide stable supply of NEV batteries to Honda, mainly for battery electric vehicles (BEVs). The first model equipped with a CATL battery is scheduled to be launched in the Chinese market in 2022. This alliance will be further expanded to the global level in the future. Moreover, battery recycling and reuse also will be a topic in further discussions between CATL and Honda.”

It seems that Honda is preparing the ground for the upcoming electrification and it’s great to see that the partnership with CATL is mostly around batteries for all-electric cars.
For CATL, it’s another global OEM customer and an important 1% investment, which may help to finance further development and investments in new manufacturing capacity.

Honda, as a shareholder and customer, can now count on stable battery supply, which seems to be one of the priorities for all the manufacturers around the world, as they would not want to see production constraints. Development of a brand new BEV is an expensive process and if it’s not selling because it can’t be produced, it’s a business failure.

Honda’s general strategy will be probably highly diversified, as in the U.S. for example, the Japanese company teamed with GM.

 

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