DETROIT, Oct 14 (Businesshala) – American commercial electric vehicle maker Electric Last Mile Solutions Inc. (ELMS) (ELMS.O) said on Thursday that it has partnered with China’s Contemporary Amperex Technology Co., Ltd. (CATL) (300750.SZ) Supply deal signed. )
Financial terms of the deal, which runs until 2025, were not disclosed. CATL’s batteries power the small Class 1 delivery vehicle that ELMS began building last month at its plant in Mishawaka, Indiana.
An ELMS spokesperson said the companies are also exploring a setup where CATL will have a US plant that will make battery cells and ship them for assembly into battery packs at the ELMS plant in Indiana.
“We have reached an important milestone in securing battery capacity in an extremely challenging supply environment,” said Rob Song, deputy chief financial officer of ELMS, in a statement.
Battery makers are ramping up production to meet rising demand around the world as carmakers accelerate the transition to electric vehicles to comply with tougher emissions regulations aimed at combating climate change.
CATL, which supplies several global automakers including Tesla Inc (TSLA.O), Volkswagen AG (VOWG_p.DE) and General Motors Company (GM.N), has not announced where it will open a US plant , but bought a facility last year. in Glasgow, Kentucky. In September 2020, Kentucky state officials offered CATL incentives for a potential battery pack plant there.
Ningde, China-based CATL, which already has US sales offices, previously declined to comment on plans for the US market. President Joe Biden has prioritized supporting the rollout of electric vehicles to make the United States competitive with China.
Under the deal with ELMS, CATL will provide lithium-iron phosphate (LFP) batteries using a simple cell-to-pack technology. The LFP chemistry is less expensive and safer than the cobalt- or nickel-based cathodes in other batteries.
In August, Michigan-based ELMS Troy, which went public through a reverse merger with a Special Purpose Acquisition Company (SPAC) in June, said it was not aware of the effects of COVID-19 and industry-wide supply chain problems. It was on track despite manufacturing 1,000 vans this year.
Following the smaller van, which has a starting price of $34,000 before federal tax credits, ELMS plans to build a larger Class 3 truck in the second half of 2022.