Commercial EV startup ELMS signs battery supply deal with CATL

Electric Last Mile Solutions

14/10/2021 12:00

By Ben Klayman
    DETROIT, Oct 14 (Reuters) - U.S. commercial electric vehicle
maker Electric Last Mile Solutions Inc (ELMS)  ELMS.O  on
Thursday said it has signed a battery supply deal with China's
Contemporary Amperex Technology Co Ltd (CATL)  300750.SZ . 
    Financial terms of the deal, which runs through 2025, were
not disclosed. CATL's batteries power the Class 1 small delivery
vehicle that ELMS began building last month at its plant in
Mishawaka, Indiana. urn:newsml:reuters.com:*:nL4N2QO2KM
    The companies are also exploring a setup where CATL would
have a U.S. plant that would make battery cells and ship them to
the ELMS plant in Indiana for assembly into battery packs, an
ELMS spokesman said.
    "We reached an important milestone to secure battery
capacity in an extremely challenging supply environment," ELMS'
deputy chief financial officer, Rob Song, said in a statement. 
    Battery makers are boosting production to meet soaring
worldwide demand as carmakers accelerate the shift to electric
vehicles to comply with tougher emission rules aimed at tackling
climate change.    
    CATL, which supplies numerous global automakers including
Tesla Inc  TSLA.O , Volkswagen AG  VOWG_p.DE  and General Motors
Co  GM.N , has not announced where it would open a U.S. plant,
but last year purchased a facility in Glasgow, Kentucky.
Kentucky state officials in September 2020 offered incentives to
CATL for a potential battery pack plant there. 
    Ningde, China-based CATL, which already has U.S. sales
offices, has previously declined to comment on plans for the
American market. President Joe Biden has made it a priority to
support the rollout of electric vehicles to make the United
States competitive with China.
    Under the deal with ELMS, CATL will provide lithium-iron
phosphate (LFP) batteries using a simpler cell-to-pack
technology. The LFP chemistry is less expensive and safer than
cobalt- or nickel-based cathodes in other batteries. 
    In August, Troy, Michigan-based ELMS, which went public in
June through a reverse merger with a special-purpose acquisition
company (SPAC), said despite impacts from COVID-19 and
industry-wide supply chain problems it was on track to build
1,000 vans this year.
    Following the small van, which has a starting price of
$34,000 before federal tax credits, ELMS plans to build a larger
Class 3 truck in the second half of 2022. 

 (Reporting by Ben Klayman in Detroit; editing by Jonathan
Oatis)
 ((benjamin.klayman@thomsonreuters.com; 313-600-2277; Reuters
Messaging: benjamin.klayman.thomsonreuters.com@reuters.net))