CATL and Honda ink partnership on batteries

Chinese largest battery supplier CATL and Japan's Honda Motor Co inked a strategic partnership on new energy vehicle batteries on Friday as the auto industry is speeding up its transition towards electrification.

Honda will buy a 1 percent stake in CATL, who will provide competitive power batteries and enable Honda to secure a stable supply of batteries.

The two companies will also jointly develop battery technologies. Honda is expected to launch its first electric vehicle with CATL's battery in China by 2022.

In addition to the joint development, the two sides will expand their global partnership in recycling and reusing batteries.

"As the speed of electrification continues to increase, CATL will be a source of new strength for Honda," said Honda executive Toshihiro Mibe.

"We believe that our long-term alliance will enable Honda to further increase the competitiveness of our electrified products."

"Honda is a key player in global electrification," said Zhou Jia, president of CATL.

"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."

Last February, CATL signed agreement with Honda to develop electric vehicles and provide 56GWh lithium-ion power batteries to Honda before 2027.

The new partnership comes at a time when international carmakers are buying stakes in Chinese power battery companies to ensure supplies as they rev up production of electric vehicles.

Earlier this month, Daimler acquired a stake of around 3 percent in Chinese battery cell maker Farasis Energy.

In late May, Volkswagen acquired a 26 percent stake in Gotion High-Tech Co to become the largest shareholder of the Chinese battery manufacturer.

In addition to Honda, CATL is also battery supplier of Volkswagen, BMW, Tesla and other world-renowned carmakers, while Honda is the first overseas auto group with a stake in CATL.

CATL said that through the nonpublic issuance of stocks, CATL will strengthen its battery development and further expand production capacity to meet growing market demands and enhance the company's profitability.

In the first half of this year, CATL's total installed capacity was 2.29 GWh, giving it a 48.78 percent market share, according to the China Automotive Battery Industry Innovation Alliance.

Last year, Honda with its Chinese joint venture GAC launched its first pure electric vehicle, the VE-1 SUV.

Globally, Honda has cooperated with Japanese electronics maker Hitachi's auto parts subsidiary to develop, produce and sell motors to be used in hybrids, plug-in hybrids and battery-powered electric cars.

The carmaker has also partnered with General Motors to develop two new electric vehicles.

The two sides will cooperate to develop hydrogen fuel cell vehicle technology.