Honda has acquired approximately 1% of CATL shares and intends to launch its first CATL-powered EV in 2022.

Honda and Contemporary Amperex Technology Co. (CATL) jointly announced today a comprehensive strategic alliance on batteries for New Energy Vehicles - "mainly for battery electric vehicles."

The deal includes several points, starting with Honda's acquisition of about 1% of CATL shares.

The one-way capital alliance opens the way for a deeper partnership in:

  • joint development of batteries for New Energy Vehicles,
  • "and joint R&D into next-generation fundamental technologies"
  • "Stable" battery supply of batteries from CATL to Honda (mainly for BEVs)
    - first Honda electric car with CATL batteries to be launched in China in 2022
    - Honda is expected to use CATL batteries in EVs also in models sold globally in the future
  • battery recycling and reuse is a topic of further discussion

Brief info from the press release:

"By bringing together the two companies' individual technology advantages, CATL and Honda will conduct joint development on NEVs batteries and joint R&D into fundamental technologies, aiming for their future application. CATL will provide stable supply of NEV batteries to Honda, mainly for battery electric vehicles (BEVs). The first model equipped with a CATL battery is scheduled to be launched in the Chinese market in 2022. This alliance will be further expanded to the global level in the future. Moreover, battery recycling and reuse also will be a topic in further discussions between CATL and Honda."

It seems that Honda is preparing the ground for the upcoming electrification and it's great to see that the partnership with CATL is mostly around batteries for all-electric cars.
For CATL, it's another global OEM customer and an important 1% investment, which may help to finance further development and investments in new manufacturing capacity.

Honda, as a shareholder and customer, can now count on stable battery supply, which seems to be one of the priorities for all the manufacturers around the world, as they would not want to see production constraints. Development of a brand new BEV is an expensive process and if it's not selling because it can't be produced, it's a business failure.

Honda's general strategy will be probably highly diversified, as in the U.S. for example, the Japanese company teamed with GM.

 

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CATL and Honda Sign Agreement to Form Comprehensive Strategic Alliance on Batteries for New Energy Vehicles

Jul 10, 2020, 05:01 ET

Alliance will include joint development of batteries for new energy vehicles (NEVs) and joint R&D into next-generation fundamental technologies.
Stable supply of NEV batteries from CATL to Honda.
Two companies will further expand their discussion on a battery recycling and reuse.
Honda has acquired CATL shares through CATL's non-public issuance of stocks.
NINGDE, China, July 10, 2020 /PRNewswire/ -- Contemporary Amperex Technology Co., Limited (CATL) (SZ: 300750) and Honda (TYO: 7267) have signed an agreement to form a comprehensive strategic alliance on new energy vehicle batteries to strengthen their strategic partnership and promote the popularization of e-mobility. This agreement will enable the two companies to begin discussions on a broad range of areas including joint development, stable supply, and the recycling and reuse of batteries.

Working Together to Speed up the Realization of Respective Strategies for Electrified Vehicles

By bringing together the two companies' individual technology advantages, CATL and Honda will conduct joint development on NEVs batteries and joint R&D into fundamental technologies, aiming for their future application. CATL will provide stable supply of NEV batteries to Honda, mainly for battery electric vehicles (BEVs). The first model equipped with a CATL battery is scheduled to be launched in the Chinese market in 2022. This alliance will be further expanded to the global level in the future. Moreover, battery recycling and reuse also will be a topic in further discussions between CATL and Honda.

CATL is a technology company that is committed to providing advanced battery solutions for global new energy application, with businesses covering R&D, manufacturing and sales of battery systems for new energy vehicles and energy storage systems. Honda is a mobility company with motorcycles, automobiles, Life Creation (power products) and aircraft businesses around the globe, and is currently accelerating its initiatives to electrify its products on a global basis. By strengthening technological cooperation and the competitive supply system, CATL and Honda will strive to realize global electrification together.

Capital Cooperation to Strengthen Sustainable Strategic Partnership

Honda has acquired approximately 1% of CATL shares through the non-public issuance of stocks, which makes Honda a leading strategic partner of CATL. This will enable Honda to secure a stable supply of batteries with excellent product and cost competitiveness. Through the non-public issuance of stocks, CATL will strengthen its battery development and further expand production capacity, etc. Based on this alliance, the two companies will strengthen initiatives to further popularize electrified vehicles and establish a long-term relationship.

Comments by Zhou Jia, President of CATL

"Honda is a key player in global electrification. 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."

Comments by Toshihiro Mibe, Senior Managing Officer, Executive in Charge of Monozukuri (Research & Development, Production, Purchasing, Quality, Parts, Service, Intellectual Property, Standardization and IT), Honda Motor Co., Ltd.

"This alliance enables Honda to further strengthen its partnership with CATL. 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 Honda to further increase the competitiveness of our electrified products. Honda will continue its challenges toward offering joy and freedom of mobility and the realization of a sustainable society."