GM to Buy Chinese Batteries Despite Tariffs
General Motors (GM) plans to import batteries from China to power the next-generation Chevrolet Bolt, despite punitive tariffs of around 80% imposed by the Trump administration, according to a report by the Wall Street Journal. The two-year agreement with Chinese giant CATL will serve as a temporary solution until GM and its South Korean partner LG Energy Solution can produce their own batteries in the US at a lower cost. Production of the new Bolt will begin at the Fairfax plant in Kansas at the end of the year, with arrival at dealerships in 2026.
GM wants to manufacture its own lithium iron phosphate batteries, a technology that is less expensive than nickel and cobalt-based packs. In the meantime, the manufacturer will have to absorb tariffs of around 80% on these imported batteries. However, the upcoming withdrawal of the $7,500 federal credit for certain electric vehicles makes this strategy more viable: the Bolt will not be at a disadvantage compared to its competitors. LFP batteries cost about 35% less to produce than their traditional counterparts, which could allow GM to maintain a profit margin, according to an analyst quoted by the Wall Street Journal.
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This decision highlights technology gap between American manufacturers and China, which dominates the production of low-cost batteries thanks to a highly developed supply chain. Ford is also collaborating with CATL to produce cheaper batteries at a plant currently under construction in Michigan. GM and LG plan to begin manufacturing LFP batteries at their Tennessee plant in 2027. In the meantime, the agreement with CATL will help bridge the gap and enable the company to offer a Bolt for around $30,000, its most affordable electric model.
