Tesla to build US battery plant, help from China supplier: BBG

Tesla (TSLA) aims to construct a new battery plant in Nevada using technology from Chinese battery manufacturer CATL (300750.SZ), Bloomberg reports. While the factory would utilize equipment from CATL, operations and management would remain fully in Tesla's control.

Yahoo Finance Autos Reporter Pras Subramanian breaks down the details.

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Editor's note: This article was written by Angel Smith

Video Transcript

RACHELLE AKUFFO: Well, Tesla is looking to put more made in America batteries in its cars, but with the help of a Chinese manufacturer, according to a Bloomberg report.

We have "Yahoo Finance's" very own Pras Subramanian to break this down for us. So Pras, walk us through this development here.

PRAS SUBRAMANIAN: Hey, Rachel. Yeah. So Bloomberg reporting that Tesla is setting up this new battery factory or facility here with a twist. So it's going to be at their Giga Nevada factory near Reno. Basically, CATL, the Chinese battery maker, is going to supply them with machinery to make these batteries.

And what will happen is Tesla will own the facility. They'll own the machinery. They'll employ all the workers and take on all-- bear all the costs. And they're only CATL employees that'll will be the ones that set up the machinery.

So on paper, looks interesting. But this is a big political hot potato. Ford had a similar issue now with the factory in Michigan. A lot of heat from Republicans mostly about how they're concerned that Chinese and other types of rogue actors will have access to IP, battery IP, get their foot in the door in America in a battery production point of view.

So that's been an issue there. So will we see that happen for Tesla. We'll see because it seems very similar to what Ford is doing with CATL in Michigan.

AKIKO FUJITA: Pras Subramanian staying on top of all those developments for us today. Thanks so much.