Apple in talks with Chinese auto battery firms

Apple Inc is in early-stage talks with China's CATL and BYD about the supply of batteries for its planned electric vehicle, four people with knowledge of the matter said.

The discussions are subject to change and it is not clear if agreements with either CATL or BYD will be reached, said the people who declined to be named as the discussions are private.

Apple has made building manufacturing facilities in the United States a condition for potential battery suppliers, said two of the sources. CATL, which supplies major carmakers including Tesla Inc, is reluctant to build a US factory due to political tensions between Washington and Beijing as well as cost concerns, the two people said. It was not immediately clear if Apple is also talking to other battery makers.

Apple, which has yet to make a public announcement about its car plans, declined to comment. CATL, the world's biggest automotive battery maker, and BYD, the world's No. 4, also declined to comment.

Apple is in favor of using lithium iron phosphate batteries that are cheaper to produce because they use iron instead of nickel and cobalt which are more expensive, the four people said.

It has been working on self-driving technology and has targeted 2024 for the production of a passenger vehicle.

People familiar with the matter have previously said Apple's planned EV could include its own breakthrough battery technology. It was not immediately clear if the discussions with CATL and BYD involved Apple's own technology or designs.

Many battery makers are ramping up production to meet soaring worldwide demand as carmakers accelerate their shift to electric vehicles to comply with tougher emission rules aimed at tackling global warming. Chinese battery makers are expected to grow at a faster pace than their foreign peers thanks to further expansion of the world's biggest EV market, SNE Research said.

CATL is planning a major new automotive battery plant in Shanghai. The factory would near Tesla's China manufacturing operations.