Honda and CATL enter battery development alliance

13 July 2020

Honda and Chinese battery manufacturer Contemporary Amperex Technology (CATL) are to form an alliance on electric-vehicle (EV) battery strategy. The companies hope this latest agreement will strengthen their strategic partnership and promote the popularisation of e-mobility.

As part of the alliance, Honda and CATL will begin discussions on a broad range of areas including joint development, stable supply and the recycling and reuse of EV batteries. The carmaker is also set to buy a 1% stake in the battery manufacturer.

Speeding up strategies

CATL and Honda will cooperate on the research and development of fundamental battery technology, with an eye towards future applications. The carmaker will receive a stable supply of batteries from the Chinese company, which will be used predominantly in their battery-electric vehicles (BEVs). The first model to sport a CATL battery is scheduled for launch on the Chinese market in 2022.

Acquiring 1% of the battery manufacturer’s shares through the non-public issuance of stocks, Honda has become a leading strategic partner of CATL. This will further ensure the security of supply for the carmaker, with cost and product competitiveness in mind. CATL meanwhile will see strengthened battery development and expanded production capacity.

A strengthened alliance

′This alliance enables Honda to further strengthen its partnership with CATL,’ said Toshihiro Mibe, senior managing officer at the carmaker. ′As the speed of electrification continues to increase, CATL will be a partner that will give Honda new strength, and we believe that our long-term alliance will enable us to further increase the competitiveness of our electrified products. Honda will continue its challenges toward offering joy and freedom of mobility and the realisation of a sustainable society.’

′Honda is a key player in global electrification,’ said Zhou Jia, president of CATL. ′Through this strategic cooperation, CATL and Honda will establish a stronger global partnership. We are working together to deliver more competitive products and solutions to global electrification, and to finally achieve a clean and pleasant style of mobility.’

Cooperation is crucial

As automotive companies set their sights on an electrified future, they are also having to navigate the financial fallout from the coronavirus (COVID-19) pandemic. This has pushed many manufacturers into one particularly overcrowded boat. There is a need to quickly develop electric capabilities in a way that does not further endanger already constrained budgets. The solution has become apparent; greater cooperation. Both Toyota and CATL prove to be good examples of this.

In April, the carmaker announced an expansion of its partnership with battery-recycling enterprise Société Nouvelle d’Affinage des Métaux (SNAM). The agreement will extend the sustainable usability of end-of-life batteries from Toyota’s hybrids and BEVs. After collecting the used units, SNAM will prepare them for ′second-life’ renewable energy storage or if they are not suitable, extract the valuable materials for recycling.

Meanwhile, in July last year, CATL entered into a supply partnership with Toyota. The deal saw both companies working on the development of battery technology, while the two manufacturers also discussed how to improve product quality and the reuse and recycling of spent units.