GM to Continue to Temporarily Buy Batteries From China despite Tariffs

General Motors (GM) has announced a significant step in its strategy to keep the Chevrolet Bolt electric vehicle (EV) affordable, by opting to source batteries from China’s Contemporary Amperex Technology Co. Limited (CATL) for the upcoming second-generation Bolt. This arrangement comes despite the tariffs imposed by the Trump administration, which could add up to 80% in duties on these imported batteries. The decision, while temporary, highlights the ongoing challenges faced by GM in the race to lower EV production costs and make electric vehicles more accessible. (See our story On Robin Zeng and CATL in this Newsletter)

The importation of these lithium iron phosphate (LFP) batteries, a cheaper alternative to traditional nickel and cobalt-based options, is expected to power the Bolt for the next two years. The strategy is a stopgap measure until GM and its Korean partner LG Energy Solution can ramp up their U.S.-based battery production. The new Bolt, projected to start production at GM's Fairfax Assembly Plant in Kansas later this year and hit dealerships by 2026, is expected to retail for around $30,000. The deal offers a glimmer of hope for GM's ongoing quest to keep its electric models competitive in a market where consumers are increasingly seeking affordable EV options.

GM Will Make its Own Batteries One Day

This decision is a notable shift for GM, which has previously focused on creating electric models with higher-cost battery chemistry. Under the guidance of Kurt Kelty, a Tesla veteran hired in 2024 to lead GM’s battery development, the company is now diversifying its battery options, including LFP chemistry, which is 35% cheaper to produce than its nickel- and cobalt-based counterparts. While this decision aligns with GM’s goal to make affordable EVs, there are still concerns regarding the long-term feasibility of relying on foreign suppliers for battery production, especially in light of the ongoing trade tensions between the U.S. and China.

However, GM’s reliance on CATL for the Bolt's batteries highlights a gap in the U.S. auto industry's ability to produce the low-cost batteries necessary for mass EV adoption. While Chinese manufacturers like CATL and BYD have the upper hand in battery manufacturing, U.S. automakers and their Korean and Japanese partners are scrambling to catch up. Ford, for example, has licensed CATL’s technology to manufacture its own cheaper EV batteries at a factory currently under construction in Michigan.

Only Temporary

While the GM-CATL deal offers a temporary solution, it underscores the broader challenges the U.S. auto industry faces in securing affordable, sustainable battery sources. GM has plans to begin manufacturing LFP batteries with LG Energy Solution in Tennessee by 2027, but this partnership still leaves the company vulnerable to global supply chain disruptions and the uncertainties of international trade policies.

Despite the temporary setback, GM’s commitment to transitioning to electric vehicles remains strong, with the automaker continuing to invest in both U.S.-based manufacturing and the development of more affordable EVs. The second-generation Chevrolet Bolt, powered by these imported batteries, represents a critical step in GM’s EV strategy, one that could help make electric vehicles more accessible for a broader range of consumers while the company works to secure its future in the rapidly evolving EV market.

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