U.S.-China Auto Industry: Battery Technology Licensing Deal

American automakers seek access to cutting-edge battery technology while navigating complex U.S.-China relations.

### Navigating Political Tensions: U.S. Automakers and Chinese Battery Technology
* 🤝 The current landscape resembles a "**political handball**," with the U.S. and China in a **delicate balancing act** as American automakers navigate their interests amid geopolitical tensions.
* 🔋 Major U.S. automakers like GM, Ford, and Stellantis have invested **billions into battery production** and joint ventures with Korean battery manufacturers, receiving **substantial government subsidies** in the process.
* ⚡ However, these companies face challenges in battery production, as creating electric vehicles (EVs) is a **complex endeavor**, particularly for traditional automakers venturing into this space for the **first time**.
* 💡 A potential deal, still in tentative discussions, could allow American car companies to **access advanced battery technology** from a Chinese firm while avoiding political pitfalls associated with **direct collaboration**.
* 🇯🇵 Notably, a Japanese company, TDK, would manage operations, acting as a **middleman to facilitate the licensing of battery technology** from the Chinese company Seattle, which is less known but **significant in the consumer electronics sector**.
* 📈 GM and other automakers would purchase batteries through fixed-term contracts, providing them **some insulation from price fluctuations** in the market.
* 🗳 The political sensitivity surrounding this deal means that the outcome of the **upcoming presidential election in November** could **significantly influence the negotiations and their viability moving forward**.

Well, this is a political handball, it feels like. Yes. You know, it is very sensitive. You know, we've got U.S. and China. The U.S. is trying really hard to decouple from China, and Chinese companies are trying really hard to access the U.S. market, and the automakers, the American automakers, are caught in the middle because, you know, GM, Ford, you know, every Stellantis, they've all poured billions of dollars into making batteries and forming joint ventures with the Korean battery makers and, you know, gotten a lot of subsidies from the U.S. government in order to do so. But because these are not selling well, because they've had struggles making batteries, which is normal, you know, making batteries and EVs for the first time in your 100-year history, it's not going to go smoothly right off the bat. It never does. Didn't for Tesla.

It doesn't for anybody. So they're under pressure. And so this potential deal, which is still tentative, you know, it's just talks, nothing is finalized, would be a way for American car companies to get access to cheap, you know, really cutting-edge battery technology from China without tripping up all the political wires that could, you know, potentially chip up when you work with a Chinese company. Right. Well, I think the basics of what we heard from sources is really important. The mechanics are such that the battery technology is licensed from Seattle, a Chinese company, but the operations are run by a conglomerate from Japan called TDK, which many of the people on this show probably haven't heard of, but they're basically a consumer electronics company. And then GM and other automakers, I think, is what we're hearing. Right. Gaby would buy the batteries on fixed-term contracts, so they're kind of

insulated from price swings. Take it from there. What else do we know? Well, I think, you know, I think one of the most interesting things about this is that you've got a Japanese company acting as a middleman. You know, up until now, we've seen Ford and Tesla do these kind of cute kind of licensing deals where they can use Seattle technology without, you know, violating rules or tripping any political wires. Now, this is a new development in how the auto industry is adapting to the political environment and the environment and the fact that they're, you know, not profitable on making movies yet. So we know that. Yes, we know that GM and Seattle and Japan's TDK, which makes battery there's a inspired for the iPhone. They make batteries for consumer electronics. They want to get into the EV battery business and this could be a way into it. So they're looking at states in the southern U.S..

You know, and I think, you know, obviously, this is so sensitive politically that I think the results of the presidential election in November could potentially, you know, affect the outcome of these talks.

GM in Talks to Buy Chinese Batteries Made in US by TDK

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Bloomberg Technology

American Automakers' Struggle with Battery Production

American automakers are caught in the middle of the U.

-China decoupling, struggling to sell EVs and make batteries despite significant investments.

A tentative deal is being discussed for American car companies to access cutting-edge battery technology from a Chinese company, with operations run by a Japanese conglomerate.

The plan involves fixed-term contracts for GM and other automakers to buy the batteries, aiming to alleviate their production challenges.

The Auto Industry's Adaptation to the EV Market

A Japanese company is now acting as a middleman in the auto industry's shift towards electric vehicles (EVs).

This development marks a change in how companies like Ford and Tesla are navigating licensing deals and political challenges.

GM and Japan's TDK, known for making batteries for consumer electronics, are looking to enter the EV battery business by targeting states in the southern U.

The Political Impact on Presidential Election Talks

The upcoming presidential election in November is politically sensitive and may influence the outcome of ongoing talks.

The results of the election could have a significant impact on the negotiations.

There is a potential correlation between the election outcome and the direction of the talks.