Apple (AAPL) is talking with Chinese companies CATL and BYD about setting up an electric vehicle battery factory in the U.S., according to a Reuters report citing confidential sources. The factory would supply batteries for Apple’s planned electric vehicle (EV).
The discussions are still in the early stage and it is not clear if the parties will agree. CATL, which supplies Tesla (TSLA), is expanding its battery manufacturing capacity and has plans for a new battery plant in Shanghai, near Tesla’s manufacturing facility.
Apple has not yet publicly revealed its EV project. But the company is believed to be working on a passenger vehicle that could go into production in 2024, according to Reuters. (See Apple stock analysis on TipRanks)
Apple is insisting that its EV battery suppliers build U.S. manufacturing facilities, according to the report. But CATL is reluctant to set up a U.S. manufacturing plant because of political tensions between the U.S. and China.
“My understanding is that Apple is talking about building advanced battery production factories here, here in the U.S.,” Reuters quoted senior White House economic adviser Jared Bernstein as saying.
The Biden administration has proposed an infrastructure spending plan that includes a budget of $174 billion to boost the U.S. domestic EV market.
Citing highlights from Apple’s WWDC 2021 event, Morgan Stanley analyst Katy Huberty reiterated a Buy with a price target of $161 on Apple stock. Huberty’s price target implies 27.03% upside potential. The analyst noted that the upcoming software updates and hardware launches will allow Apple’s growth to continue for a third consecutive year in Fiscal 2022.
The analyst said, “Apple’s vertically integrated ecosystem of world-class hardware, software, and industry-leading services remains a key point of differentiation that competitors cannot replicate.”
Consensus among analysts is a Moderate Buy based on 19 Buys, 5 Holds, and 2 Sells. The AAPL average analyst price target of $157.58 implies 24.33% upside potential to current levels.
AAPL scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.