- Toyota will enter a comprehensive partnership with Contemporary Amperex Technology (CATL), the world's largest supplier of electric vehicle (EV) batteries, the automaker announced this week.
- The deal includes the production of EV batteries and new energy vehicle (NEV) batteries for plug-in hybrids, the development of new battery technology and the reuse and recycling of spent batteries, according to a press release.
- The move comes after Toyota launched EV battery partnerships with Chinese supplier BYD and Panasonic, one of Tesla's current suppliers and CATL's competition for largest battery supplier.
Like many of its competitors, including BMW, Ford and Volkswagen, Toyota is working to accelerate the development of its electric and hybrid vehicles. Partnering with CATL will help the automaker secure supply in an increasingly competitive race to scale up EV production in the next five to 10 years.
Currently, EV batteries remain one of the most difficult components to manufacture in-house and the vast majority of the raw materials and suppliers are based in China. As a result, Toyota, Volkswagen and other firms are focusing on forging partnerships and joint ventures to get operations up to scale quickly and ensure supply is in place as overall manufacturing ramps up.
The additional benefit of sourcing in China is proximity and access to the country's own growing market for consumer EVs. Toyota announced the launch of its first two all-electric vehicles for the Chinese market earlier this year which will be available starting in 2020. In the announcement, the company said this expansion is part of a global strategy to encourage greater EV/NEV adoption worldwide.
In addition, Toyota is expanding into the Indonesian market, first with hybrid models and eventually all electric ones, according to a Reuters report from June. The automaker plans to invest $2 billion in the venture. "Because the Indonesian government already has an electric vehicle development map, Toyota considers Indonesia a prime EV investment destination," Toyota President Akio Toyoda said in a statement.
According to Bloomberg, Toyota forecasts global annual sales of 5.5 million EVs by 2025.