Porsche is in talks to buy EV batteries from China’s CATL

Porsche is in discussions to procure electric-car batteries from China’s Contemporary Amperex Technology Co. Ltd. (CATL), as global automakers widen their supplier networks to secure the key components for future vehicles.

The German carmaker and CATL are “in good talks,” Porsche research and development chief Michael Steiner told reporters Wednesday in the city of Fuzhou, China, adding he meets with CATL management regularly. “They are really catching up.”

Sufficient battery supplies are crucial for automakers vying for pole position in the burgeoning electric-car market. While Porsche parent Volkswagen AG has already picked CATL as one of its suppliers, the first all-electric Porsche — unveiled on Wednesday — uses batteries from South Korea’s LG Chem Ltd.

Adding a high-profile customer such as Porsche would be a boon for CATL as it seeks an edge over competitors LG Chem, Panasonic Corp. and BYD Co. CATL is building a plant in Germany to strengthen its presence in Europe — the region where Porsche builds all its vehicles. The battery maker has already secured local premium brand BMW AG as a customer.

Panasonic has a long-standing relationship with electric-car leader Tesla Inc., though the U.S. marque is also said to be buying batteries from LG Chem for cars that will be built in its new China factory. Porsche’s sister brand Audi, maker of the e-Tron electric vehicle, is in advanced talks to buy batteries from China’s BYD, people familiar with the matter have said.

Porsche’s China chief, Jens Puttfarcken, said Wednesday the carmaker is working to get an exemption from a 10% purchase tax in the country for its electric vehicles, something Tesla already obtained. The German brand probably won’t get it by the time the newly introduced all-electric Taycan starts selling, but is confident it can get it within 2020, he said in an interview in Fuzhou.

“We are working intensively with Chinese authorities,” Puttfarcken said.

Source: Bloomberg