According to Reuters reports, Apple is in talks with Chinese companies BYD & CATL over car batteries, another indicator that the “Apple Car” is one step closer to reality. This is important news for the global production and competition of electric vehicles, as well as the broader electric vehicle supply chain.
On this episode of MarketScale TV, Voice of B2B Daniel Litwin spoke to Dr. Richard Kilgore, Associate Professor of Management and Business Administration at Maryville University, spoke about Apple’s auto related to China’s EV footprint and understood whether it is viable to build relationships with Chinese suppliers as the country’s electric vehicle production continues to grow and the Electrical components industrial sector seeks independence from US trade partnerships. Kilgore brings over 20 years of industry consultancy experience to our conversation today, having worked with a variety of large corporations including British Aerospace and Boeing.
CATL is the world’s largest battery supplier, and any business decision they make will impact the larger EV supply chain and competition, Kilgore said. There is always the possibility that a supplier will become stronger than the manufacturer itself.
“That is the case with electric vehicles, we see such strategic shifts,” said Kilgore, “where the manufacturers are no longer the decision-makers in the industry.”
CATL already has a battery supplier relationship with Tesla, with an established presence supplying critical components for US companies and their vehicles. However, CATL only supplies Tesla with batteries for Chinese-made cars, and while Apple is pushing CATL to open a U.S. manufacturing facility if they agree to work with the big tech company, CATL has raised concerns about opening a facility on U.S. soil open.
“The more you understand the negotiations between Chinese and US companies, the more there is always that consideration,” said Kilgore. “To convince Tesla and Apple and every other US vehicle manufacturer to use a CATL battery, there has to be something else in exchange for those batteries.”
Estimates by major banks HSBC and UBS show that by 2030 three out of five new cars sold in China will be electric, which means that the Chinese market itself, especially with its combination of public transport infrastructure, has a lot of interest in electric vehicles. In our interview, Kilgore also offers analysis of how this market will flow into Apple’s auto-launch strategy.
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