January 22, 2021
car

GM, Ford Need Electric-Car Batteries, but Take Different Paths to Get Them

Auto makers, pumping billions of dollars into developing electric cars, are now facing a critical choice: get more involved with manufacturing the core batteries or buy them from others.

Batteries are one of an electric vehicle’s most expensive components, accounting for between a quarter and a third of the car’s value. Driving down their cost is key to profitability, executives say.

But whereas the internal combustion engine traditionally has been engineered and built by auto makers themselves, battery production for electric cars is dominated by Asian electronics and chemical firms, such as

LG Chem Ltd.


051910 4.47%

and

Panasonic Corp.


PCRFY -2.34%

, and newcomers like China’s

Contemporary Amperex Technology Co.


300750 2.05%

With regulators world-wide pushing car companies to sell more electric cars, auto executives worry there won’t be enough factories building high-quality batteries.

California, the U.S.’s largest car market, said last month it would end the sale of

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