U.S. commercial vehicle maker buys battery supply deal with China

Wednesday - United States commercial vehicle maker Electric Last Mile Solutions Inc. ELMS announced it had signed a battery supply deal with China's Contemporary Amperex Technology Co Ltd CATL Financial terms of the deal, which runs until 2025, were not disclosed. CATL's batteries power a Class 1 small delivery vehicle that ELMS built last month at its plant in Mishawaka, Indiana.

The companies are also exploring a setup in where CATL would have a U.S. plant that would make battery cells and deliver them to an ELMS plant in Indiana for assembly into battery packs, an ELMS spokesman said.

We achieved an important milestone to secure battery capacity in an extremely challenging supply environment, ELMS deputy chief financial officer, Rob Song, said in a statement.

Battery makers are boosting production to meet soaring global demand as carmakers accelerate the switch to electric vehicles to comply with tougher emission rules aimed at tackling climate change.

CATL, which supplies numerous global automakers including Tesla Inc., Volkswagen AG and General Motors Co, has not announced where it would open a U.S. plant, but bought a facility in Glasgow, Kentucky last year State officials offered incentives to CATL in September 2020 for a potential battery pack plant there.

Ningde, China-based CATL, which already has U.S. sales offices, declined to comment on the plans for the American market. In order to make China competitive with the United States, Joe Biden has made it a priority to support the rollout of electric vehicles.

Under the deal with ELMS, CATL will provide Lithium-Ion phosphate LFP batteries using a simpler cell-to-pack technology. The LFP chemistry is less expensive and safer than nickel-based or cobalt-based cathodes in other batteries.

The special-purpose acquisition company SPAC went public at Mid Atlantic in August after a Troy, Michigan-based ELMS, which went public through a reverse merger with a Troy, Michigan-based application company COVID - 19 in June ; it said he planned to install 1,000 vans next year despite impacts from the COVID-19 and industrial supply chain problems.

Following the larger van which has a price of $34,000 before federal tax credits, ELMS plans to start a Class 3 truck in the second half of 2022.