Representatives of Tesla, CATL and the White House didn’t immediately respond to requests for comment. Patel also didn’t respond.
Tesla is in expansion mode, deploying its $22 billion in cash to crank up production volumes and lower costs as it faces increased competition. CATL, which makes lithium iron phosphate batteries, a chemistry that is cheaper than the nickel-based batteries used in the West, is key to that plan. The automaker is considering building the battery plant in Texas to supply its EV assembly plant there, though a location hasn’t been finalized, some of the people said. Like the Ford deal structure, Tesla would own and operate the factory while licensing the technology from CATL.The auto industry has been lobbying to influence how the U.S. Treasury Department will interpret requirements in President Joe Biden’s signature climate package. The law is intended to wean the U.S.
Ford’s deal has provoked ire from lawmakers including Democratic Sen. Joe Manchin of West Virginia and Republican Sen. Marco Rubio of Florida, who argue that it allows the Chinese company to benefit from U.S. subsidies. Ford has said CATL wouldn’t receive any U.S. tax dollars from the deal. Tesla may get some political pushback to a deal with CATL, similar to what Ford has seen, Barclays Plc analyst Dan Levy said in a research note.