Toyota expands battery supply with CATL deal

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Jun 16, 2019

As it gradually moves to begin selling more plug-in and electric cars, Toyota is widening its net to secure more batteries.

Japan’s largest automaker signed a deal this week to buy batteries from Chinese suppliers Contemporary Amex Technologies (CATL) and BYD. The agreement adds to a January deal Toyota signed to buy batteries from Panasonic.

All three deals go beyond simple battery supplies. Toyota will work with the three battery suppliers on everything from developing new solid-state batteries to building out systems to recycle the batteries they produce.

Toyota executives have said in the past that they don’t believe lithium-ion batteries are the best solution for electric cars, and that they expect better chemistry to emerge to make electric cars more affordable, reliable, and safer.

With the electric-car market looking set to expand dramatically in the next few years, Toyota and other automakers that have stood on the sidelines are scrambling to ramp up their own supply chains to begin producing EVs.

Toyota announced in June that it is developing its first dedicated electric-car platform, potentially for a mid-size SUV, in conjunction with Subaru.

Executive vice president Shegeki Terashi told reporters in Japan last month that the company expects half of its sales by 2025 to come from hybrids, electric-cars, or plug-ins, according to a Reuters report.  “There may be a gap between the amount of batteries we can produce, and the amount of batteries we may need,” he said at the time.

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