Pulse News

**The Electric: The Chinese Companies That Want to Show Americans How to Make First-Rate EV Batteries**

By Steve LeVine

Mar 10, 2025, 4:30am PDT

Late next year, Massachusetts-based electrode developer 6K plans to deliver iron-based cathodes to a surprising customer—Chinese battery maker Gotion, which will turn the dark powder into batteries at an Illinois factory carved out of a former Kmart.

For Gotion, China's fifth-largest battery producer, the deal signals a belief that buying American could help it navigate the hostility it has faced in the U.S., including criticism last year by President Donald Trump. The deal also reflects the reality of international commerce: While the U.S. and China have exchanged salvos of tariffs and technological restrictions since Trump's inauguration in January, ambitious Chinese battery companies hope to elude the tensions and do business in the U.S. anyway. Governments can put up roadblocks and stop signs, but the profit motive is a formidable force, and nimble business players often figure out how to proceed despite the obstacles.

In the case of Volkswagen-backed Gotion, it hopes to gain an advantage over Chinese rivals such as Contemporary Amperex Technology Ltd., China's biggest battery maker, in the relatively new U.S. market.

Other Chinese companies are also circling, many of them startups: Red Rock Innovations, a lithium-iron-phosphate startup founded by three Chinese battery veterans, including one formerly with CATL, is attempting to raise $550 million to build a 10 gigawatt-hour LFP battery plant in Nevada, sufficient to equip 150,000 electric vehicles per year. VTA Technology, a battery startup founded by veterans of Chinese carmaker Nio, is also raising funds with hopes of building battery gigafactories in the U.S., according to a company slide deck that we reviewed.

One thing the companies largely share in addition to their links to China is a focus on LFP, the world's most common EV battery chemistry, used in most Teslas and Chinese-made EVs, in addition to most stationary storage batteries. Western carmakers made early bets on nickel-based batteries, but many companies, including Ford, General Motors, and VW, have recently made plans to introduce some LFP-powered models.

Their switch to LFP, however, has a twist: Chinese companies including Byd, CATL, and Gotion manufacture virtually all the world's LFP batteries, as well as the equipment needed to make them, and employ most of the world's LFP-making workforce. There are no large commercial LFP factories in the U.S. But EVs containing Chinese-made batteries are generally not eligible for tax credits under the Inflation Reduction Act, which is meant to encourage the rise of a U.S. supply chain not reliant on Chinese companies.

The lack of a domestic U.S. supply of LFP has created a potential opening in the country for Gotion, Red Rock, and VTA. As we have reported, Trump has said he would open the U.S. to Chinese EV companies as long as they employ Americans, and most analysts think he would extend that invitation to Chinese battery makers as well, providing a way for the U.S. to obtain their know-how.

"There are many people outside of the U.S. who are eager to build their legacy, bring their knowledge and build a global firm," said Bei Zhang, Red Rock's chief business officer. "The barrier is all the geopolitical tension."

Gotion declined to comment. But in its conversations with 6K, the company seemed "hell-bent" on finding a U.S. supplier of cathodes, said Sam Trinch, president of 6K's energy division.

The effort may reflect the hard slog Gotion has faced in the U.S. since coming to the country in 2022, as we have reported. The company planned to build two U.S. plants—a $2.3 billion cathode factory in Green Charter Township, Mich., and a $2 billion plant in Manteno, III., 250 miles southwest, which would turn the cathodes into stationary battery packs that power buildings and utilities.

Despite Gotion's partially Western credentials—VW owns 20% of the company—the Green Charter plant became a target of local criticism, as well as stinging attacks by Trump and some Republican members of Congress who linked Gotion to China's Communist Party. Gotion has denied any links, saying its senior managers are not close to China's leaders.

That's left Gotion with the Illinois plant. It has faced local opposition as well, but regional politicians including Gov. JB Pritzker have continued to champion it.

The deal reflects the other reality of the U.S. battery industry—Gotion knows how to make LFP but knows that if it wants to do business in the U.S., it needs to use U.S. suppliers.

In 2022, 6K won a $50 million grant from the Department of Energy to build two pilot manufacturing lines in Jackson, Tenn.—one for nickel-based cathodes and the other for LFP—by 2025. As part of the award, 6K had to match the grant with $57.4 million of its own; the company has since raised more than $150 million in Series D and E rounds.

6K wanted the two lines to dispense with the traditional manufacturing process, which involves a lot of toxic wastewater, and instead heat the metals to 6,000 degrees Fahrenheit in a giant plasma reactor for 2 seconds. The company said the method would produce the same cathode powder without creating wastewater and would cut refining costs by 30%.

Last year, as it neared the start of construction, Gotion said 6K's method sounded terrific but that it was eager to obtain locally made LFP faster, Trinch told me. Gotion asked if 6K could produce the LFP more quickly if it first used the traditional method. In December, the DOE approved the change in the grant.

So it is that the Jackson plant will initially produce 4,000 tons of LFP a year the conventional way; that's enough to build 30,000 standard-size EVs, though the batteries will be used in stationary storage. In 2027, 6K will add 12,000 tons a year of LFP-making capacity, Trinch said; at that point, the plant will produce enough LFP to equip 123,000 EVs.

That's not a lot of LFP considering that Americans bought 1.3 million EVs last year, and BloombergNEF, a renewable energy research firm, expects that number to more than double to 3 million in 2027. But Trinch said 6K is moving cautiously toward new manufacturing capacity given the uncertainty the industry is facing. “We're doing this in chunks that we can actually swallow to survive the valley of death," he said.

Trinch said 6K is obtaining most of its raw materials from non-Chinese sources. I asked him how 6K is making high-quality LFP given that most of the cathode-making skill is in China. He reminded me that American scientists invented LFP in the U.S. in the 1990s, and that a startup begun at the Massachusetts Institute of Technology—A123 Systems—was the first company to manufacture LFP in the 2000s.

Richard Holman, who worked as a scientist at A123 almost from its founding, is 6K's chief technology officer. Holman "has been through the war and back and has been making [LFP] powder a lot," Trinch said. Holman's time at A123 was long ago in terms of battery advances. Since then, CATL and other Chinese battery makers have improved LFP's performance to make it a serious rival to nickel-based chemistries.

Simply put, for now at least, Chinese battery makers like CATL, Byd, and Gotion make the world's best LFP. As we have reported, allowing them to manufacture here would accelerate the development of an LFP industry in the U.S.

In his presidential campaign, Trump has multiple times invited Chinese EV makers to set up factories in the U.S. and hire American workers, rather than doing so in Mexico. He hasn't said anything on the subject since his inauguration, or anything about Chinese battery makers. But I asked Red Rock's Zhang whether he thought U.S. politics would shift to embrace companies with Chinese battery talent and know-how, such as his startup.

The answer was yes—the U.S. needs to develop an LFP-making industry for national security reasons, he said. "It's a matter of how and who does it."

Noteworthy: VW may be the first Western carmaker to come out with a dirt-cheap family EV. Next year, the German carmaker plans to release the $27,000 ID.2all, and in 2027 the $21,500 ID.Every1. Ford has also said it will sell an inexpensive EV in 2027 but has disclosed no details.

Chinese state-owned carmaker GAC Group had planned to begin exporting its first car to Europe in April—the electric Aion. But it made those plans before Europe slapped 45% tariffs on such imports. So GAC is hoping to shift production of the Aion to Europe, the Financial Times reported. The company is considering Hungary, Italy, Poland, and Spain, the paper wrote.

A little over a year ago, LFP battery developer Our Next Energy hit a cash crunch when a $100 million funding round fell through, as we reported at the time. The company laid off more than half its employees, and CEO Mujeeb Ijaz stepped down and became chief technology officer. Last week, the company said it had finally raised a new funding round, led in part by Crescent Ventures, a fund chaired by Ijaz's brother Mansoor, who is now chair of ONE's board. Mujeeb Ijaz returned as ONE's CEO. The company declined to say how much it raised in the new round.

Steve Levine is editor of The Electric. Previously, he worked at Axios, Quartz, and Medium, and before that The Wall Street Journal and The New York Times. He is the author of *The Powerhouse: America, China and the Great Battery War*, and is on Twitter @stevelevine.