BYD licenses production of LFP Blade batteries to GM, Ford supplier
BorgWarner Inc. has announced a strategic agreement with FinDreams Battery, a subsidiary of BYD, to manufacture lithium iron phosphate (LFP) battery packs for commercial vehicles.
As part of the deal, BYD will supply blade cells to BorgWarner, which will use them to manufacture batteries in Europe and the Americas. The duration of the agreement is eight years.
BorgWarner will also get intellectual property rights to use FinDreams's battery pack design and manufacturing process as part of the agreement.
BorgWarner is a US-based tier 1 automotive supplier listed on the New York Stock Exchange, and among its customers are GM, Ford, and Stellantis. The company is also very active in China recently. It operates 11 manufacturing facilities, and last week, it announced the start of the production of electric motors for Xpeng X9 MPV. They also revealed the same e-motor will be used in Xpeng's new mysterious B-class sedan, which will begin production in Q3 2024.
Moreover, on Feb 8, BorgWarner clinched a deal with a leading Chinese OEM to provide its dual inverter with a boost function for the automaker's plug-in hybrid (PHEV) and electric range-extended vehicle (EREV) platforms. Although BorgWarner didn't mention who the Chinese OEM is, according to CarNewsChina information, it is Great Wall Motor (GWM). The GWM prepares to launch Poer Hi4-T powered EREV pick-up soon in addition to the BEV and PHEV variants.
BorgWarner is also a supplier of electric drive modules (eDM) to Aiways and Ford's Chinese joint venture with JMC.
The agreement with BYD establishes BorgWarner as "the only non-OEM manufacturer," unaffiliated with FinDreams Battery, with the rights to localize LFP battery packs in Europe, the Americas, and select regions of Asia Pacific for commercial vehicles in class 3 and above.
Non-OEM means that Borwarg is the only automotive supplier with those licensing rights. However, there could be an auto manufacturer with the same license, hinting that more BYD deals might be announced soon.
Frédéric Lissalde, President and CEO of BorgWarner, expressed enthusiasm for the partnership, highlighting the growing global demand for LFP battery packs due to their cost competitiveness. He praised FinDreams Battery's 20-plus years of experience and success in LFP batteries for mobility sectors in China and Europe, emphasizing the synergies between the two companies in advancing cell and battery pack technology for commercial vehicles.
Micheal He, President and CEO of FinDreams Battery, emphasized the strategic importance of collaboration amidst complex geopolitical dynamics and the increasing adoption of LFP electrification for overseas commercial vehicles. He highlighted the partnership's ability to provide diverse and flexible options for overseas customers, contributing to the rapid electrification of the commercial vehicle market.
Many EV makers are now turning to LFP chemistry over NMC ternary. And LFP is BYD's world. The cells have a lower energy density than NMC but are cheaper and don't need precious metals such as Nickel, Manganese, or Cobalt, whose mining process is often controversial. Even Tesla switched to using BYD's LFP batteries for some of its models not only in China but also in Europe, so it's no wonder BorgWarner is jumping on the bandwagon.
Although the US is trying to develop the independence of its EV supply chains on Chinese battery makers, it is proving not as easy. For example, Ford announced the LFP battery plant in Michigan, which was promoted as a showcase of the US EV maker's ability to be self-sufficient. Later, it was revealed the plant will use CATL's cells and know-how.
Furthermore, BYD doesn't wait for expansion. It is building an EV factory in Europe, Hungary and is considering a new EV plant in Mexico to tap the US market. We expect more automakers will ink a battery deal with BYD in the next 2 years and will keep an eye on it.
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