China's CATL, Honda plan to cooperate on EV battery development

The deal could mean a supply of 56 GWh by 2027

TOKYO — Contemporary Amperex Technology Ltd ( CATL) and Honda Motor have signed an agreement to cooperate on jointly developing lithium ion batteries for electric vehicles, as China's top EV battery maker expands its tie-ups with Japanese automakers.

CATL said on Tuesday it had signed a memorandum of understanding with Honda under which it would guarantee supply of lithium-ion EV batteries with storage capacity of around 56 gigawatt hours (GWh) to the automaker by 2027, and set up an office near Honda's research unit in Tochigi Prefecture, outside Tokyo.

"The agreement focuses on supply of EV batteries in Asia," Honda spokeswoman Tomoko Takemori said, declining to give further details on which of its models would use CATL batteries.

"We could also consider some supply for the North American market."

Sources with knowledge of the matter told Reuters that the agreement to explore using CATL technology in Honda EVs was part of Honda's moves to diversify its battery supply bases to ensure stable stock in the longer term, and that the Japanese automaker has also been in talks with other battery makers, including current supplier Panasonic Corp.

As it pushes to meet China's stringent " green car" quotas, Honda is planning to launch its first mass-production battery EV in China later this year, while it is building a new plant for new-energy vehicles, including battery EVs and plug-in hybrid cars.

CATL, one of the world's biggest EV battery makers, adds Honda to its list of partners which already includes BMW, Volkswagen AG and SAIC Motor Corp.

The Fujian-based company has been eager to secure more Japanese clients, and established a sales and development support hub in Yokohama last year. It already counts Nissan Motor Co as a customer, supplying the batteries for the battery-electric version of its Sylphy sedan in China.

Reporting by Makiko Yamazaki, Naomi Tajitsu, Yilei Sun and Norihiko Shirouzu.

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