China’s largest battery, CATL, and Japan’s Honda Motor Co signed a strategic partnership on new energy vehicle batteries on Friday, as the automotive industry accelerates its transition to electrification.
Honda will purchase a 1% stake in CATL, which will provide competitive strength batteries and allow Honda a solid source of batteries.
The two will also jointly expand battery technologies. Honda is expected to launch its first CATL battery-powered electric vehicle in China until 2022.
In addition to joint development, the two parties will expand their partnership in the recycling and reuse of batteries.
“As the speed of electrification continues to increase, CATL will be a new force for Honda,” Honda Toshihiro Mibe said.
“We believe that our long-term partnership will improve the competitiveness of our electrified products.”
“Honda is a key player in electrification,” said Zhou Jia, president of CATL.
“Through this strategic cooperation, CATL and Honda will build a more powerful partnership.
“We are working in combination to deliver more competitive products and responses for global electrification and, despite everything, to achieve a blank and fun taste of mobility.
Last February, CATL signed an agreement with Honda to expand electric cars and 56 GWh lithium-ion batteries to Honda by 2027.
The new partnership comes at a time when foreign automakers are buying stakes in Chinese companies that force battery companies to stock up while they restart the production of electric vehicles.
Earlier this month, Daimler acquired a share of about 3% in Chinese mobile battery manufacturer Farasis Energy.
At the end of May, Volkswagen acquired a 26% stake in Gotion High-Tech Co from the largest shareholder of the Chinese battery manufacturer.
In addition to Honda, CATL is also the battery supplier for Volkswagen, BMW, Tesla and other world-renowned automakers, while Honda is the first foreign automotive organization to hold a stake in CATL.
CATL stated that through private issuance of shares, CATL will progress in its batteries and further expand its production capacity to meet the demands of the developing market and improve the profitability of the company.
In the first part of this year, CATL’s total installed capacity was 2.29 GWh, giving it a market percentage of 48.78%, according to the Innovation Alliance of the Automotive Battery Industry in China.
Last year, Honda with its Chinese joint venture GAC introduced its first vehicle purely, the VE-1 SUV.
Globally, Honda has cooperated with the Japanese electronics manufacturer’s automotive parts subsidiary Hitachi to develop, produce and sell engines for use in hybrids, plug-in hybrids and battery-powered electric cars.
The automaker has also partnered with General Motors to expand two new vehicles.
The two will cooperate to expand hydrogen fuel mobile vehicle technology.