【By Observer Net, Ruan Jiaqi】

On the 7th, U.S. media outlet The Wall Street Journal cited sources saying that despite Trump's high tariffs, the largest U.S. automaker General Motors has decided to purchase batteries from China's CATL, the world's largest battery supplier, with a cooperation period of about two years. Until this Detroit-based company and its South Korean partner LG Energy Solution build low-cost battery production lines in the United States.

According to the report, batteries imported from China will be used for General Motors' second-generation Chevrolet Bolt electric vehicles. This new car will roll off the production line at General Motors' Fairfax assembly plant in Kansas later this year and enter the dealership network as the most affordable electric vehicle in 2026.

General Motors responded that purchasing imported Chinese batteries is a "transitional" arrangement, and its ultimate goal is to produce low-cost batteries using lithium iron phosphate (LFP) manufacturing technology independently.

A spokesperson said, "For years, other American automakers have relied on foreign suppliers to obtain lithium iron phosphate batteries and related technology licenses. In order to remain competitive, General Motors will temporarily purchase battery packs from similar suppliers to power its most affordable electric vehicle models."

Nunzio De Filippis, co-CEO of logistics management company CargoTrans, told U.S. media that due to the trade war under Trump, General Motors will have to bear high tariff costs. Adding the 25% tariff imposed by Trump on foreign automotive parts, the total tariff on Chinese electric vehicle batteries will reach 80%.

Sam Abuelsamid from the automotive research and consulting company Telemetry added that the manufacturing cost of lithium iron phosphate batteries is about 35% lower than nickel-cobalt based batteries. Combined with other cost control improvements by General Motors in electric vehicles, the new Bolt equipped with Chinese batteries may achieve a small profit or be "close to profitability."

At the same time, Republicans plan to cancel the $7,500 federal tax credit starting next month, which also allows General Motors, which was unable to enjoy preferential policies due to using Chinese batteries, to avoid price disadvantages when competing with other electric vehicles.

"From a short-term economic perspective, General Motors' move may be feasible," said Abuelsamid.

The Wall Street Journal mentioned that although the low-cost lithium iron phosphate battery technology was invented in the United States in the late 1990s, it was commercialized in China. Now, Chinese companies such as CATL and BYD have leading technical expertise in the production of lithium iron phosphate batteries, and China has the most complete battery raw material supply chain.

The U.S. media believes that General Motors' decision indicates that U.S. automakers and battery manufacturers still lag behind China in the field of low-cost battery manufacturing. And cheaper batteries can reduce the price of the entire vehicle, thus promoting more consumers to accept electric vehicles.

Ford Motor, General Motors' competitor, is also obtaining technology and manufacturing process authorization from CATL, planning to produce low-cost electric vehicle batteries in a newly built factory in Michigan to power its upcoming small electric pickup truck.

According to the report, CATL declined to comment on the collaboration with General Motors.

During the first-quarter earnings call, CATL stated that the U.S. business accounts for a small portion of the company's shipments, and since last year, the company has made plans in advance according to environmental changes, so the impact of tariff policies on the company's performance is minimal. The company is actively negotiating solutions with customers. On the other hand, due to the strong demand for energy storage in emerging markets such as the Middle East and Australia, CATL has recently won large energy storage projects in these regions. The company emphasized that overall, both domestic and overseas market demands are strong, and the company's capacity utilization rate is high.

In April this year, Trump announced a 25% tariff on all imported foreign cars, claiming that the U.S. would usher in a "golden age," shouting "jobs and factories will return strongly." However, as the financial reports of U.S. automakers were released, the harsh reality given by the data was - the U.S. tariffs were hitting themselves.

Ford, General Motors, and Stellantis "Detroit Three" forecast that by 2025, the tariffs will cause a total profit loss of $7 billion for the U.S. auto industry, with Stellantis expected to lose $1.5 billion, Ford $2 billion, and General Motors $3.5 billion.

Additionally, the tariffs on basic materials such as steel, aluminum, and copper used by the U.S. automotive industry have reached 50%, causing sharp increases in the prices of raw materials and components used by U.S. automakers.

Taking Ford as an example, as one of the few automakers that retain 80% of its vehicles sold in the U.S. for local assembly, its supply chain is highly globalized, requiring thousands of components to be imported from abroad. After Trump restored and increased the tariffs on components, Ford was hit first by the pressure of rising costs.

Lately, Ford CEO Jim Farley has publicly expressed strong dissatisfaction with the Trump administration's tariff policy. He complained on a U.S. media program, "Just the tariffs this year alone have caused our expected profits to shrink by over $2 billion, forcing more projects to be postponed."

What further upset him was that Japanese automakers benefited from the "bilateral trade agreement" signed by the Trump administration with Japan, with tariffs on vehicles exported to the U.S. being only 15%, far lower than the 25% tariff on U.S.-made vehicle components. Farley believes that this makes "U.S. brands lose fair competitiveness in the global market."

Even Japanese and European brands that have set up factories in the U.S., such as Toyota, BMW, and Mercedes, have stated that some models face price increase pressures, and they are considering increasing production in the U.S. or adjusting model structures to avoid tariff risks.

This article is an exclusive contribution by Observer Net, and unauthorized reproduction is prohibited.

Original: https://www.toutiao.com/article/7536024499314262554/

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