Battery makers are boosting production to meet soaring worldwide demand as carmakers accelerate the shift to electric vehicles to comply with tougher emission rules aimed at tackling climate change.
CATL, which supplies numerous global automakers including Tesla Inc., Volkswagen Group and General Motors, has not announced where it would open a U.S. plant, but last year purchased a facility in Glasgow, Ky. Kentucky state officials in September 2020 offered incentives to CATL for a potential battery pack plant there.
Ningde, China-based CATL, which already has U.S. sales offices, has previously declined to comment on plans for the American market. President Joe Biden has made it a priority to support the rollout of EVs to make the U.S. competitive with China.
Under the deal with ELMS, CATL will provide lithium-iron phosphate batteries using a simpler cell-to-pack technology. The LFP chemistry is less expensive and safer than cobalt- or nickel-based cathodes in other batteries.
In August, ELMS, which went public in June through a reverse merger with a special-purpose acquisition company, said despite impacts from COVID-19 and industry-wide supply chain problems it was on track to build 1,000 vans this year.
Following the small van, which has a starting price of $34,000 before federal tax credits, ELMS plans to build a larger Class 3 truck in the second half of 2022.
Shares in ELMS rose 3.5 percent to $7.34 in premarket trading on Thursday. The company is based near Detroit in Troy, Mich.