CATL, or Contemporary Amperex Technology Limited, which supplies batteries to major automakers like Tesla Inc. (NASDAQ:TSLA) and General Motors Co. (NYSE:GM), has shut operations at a major Lithium mine in China.
CATL Confirms Lithium Mine Closure
The company confirmed it will temporarily halt mining operations at Jianxiawo in China for three months due to an expired permit, Bloomberg reported on Monday.
The mine accounts for 6% of the world's total Lithium output and has been under scrutiny from authorities in Beijing, who reportedly refused to extend the mine's license, the report said.
Beijing's Move To Strategize Resources?
CATL confirmed it is working on license renewal, while Citibank analysts cited in the report said it could be the CCP's move to prevent overcapacity and "anti-involution."
"We believe this could be part of the government's anti-involution initiative," adding that the mine closures should help China to re-price resources and ensure "strategic and compliant" mineral extraction.
Deal With GM, Trump Tariffs Could Hit Battery Demand
The news comes as the CATL will supply GM with LFP batteries for the Chevrolet Bolt EV, which, at $35,000, is GM's most affordable electric vehicle on sale. The deal is a stopgap agreement between the companies and will last until 2027.
CATL, which is the largest battery manufacturer in the world, also recently hit the 1 million batteries milestone as it delivered the millionth battery unit to Li Auto Inc. (NASDAQ:LI).
Elsewhere, battery manufacturers like LG Energy Storage Solutions say that President Donald Trump's tariffs could hit battery demand in the U.S. "Tariffs and an early end to EV subsidies will put a burden on automakers,” the company said.
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