US-listed Chinese firms Kandi Technologies and CBAK Energy are joining forces to set up two lithium battery production facilities in the United States.
The partnership is aimed at tapping into the growing demand within the U.S. for off-road and recreational vehicle market.
The two companies plan to deliver high energy density battery systems specifically engineered for off-road and powersports applications with the collaboration.
“This collaboration with Kandi reflects our shared vision to globalize advanced battery manufacturing while adapting to the evolving U.S. market,” Zhiguang Hu, CEO of CBAK Energy, said in a release.
“Our expertise in cell design and production will be key to establishing a reliable local supply for emerging off-road and recreational vehicle platforms.”
The collaboration comes at a time of escalating tensions between Washington and Beijing over trade tariffs, with China recently suspending exports of several critical minerals and magnets, in a move that threatens to disrupt global supply.
Strategic shift, local focus
The first facility, focused on battery pack assembly, is slated for near-term development.
Meanwhile, the second is aimed at battery cell manufacturing. It is envisioned as a longer-term project that Kandi and CBAK plan to pursue once market conditions become favorable.
Each plant will operate as a separate joint venture, with distinct ownership structures tailored to match the specific goals and scale of the respective initiatives.
Kandi will spearhead the development of the battery pack assembly facility and hold a 90 percent equity stake in that joint venture.
Meanwhile, CBAK will lead the battery cell manufacturing initiative, also holding a 90% stake in its corresponding venture.
The companies plan to integrate the production process from battery cells to complete systems. CBAK will initially supply cells from its overseas facilities, with potential future production from the U.S.-based plant.
By establishing these facilities, Kandi and CBAK aim to build a resilient domestic supply chain while capitalizing on clean energy incentives offered under the U.S. Inflation Reduction Act (IRA).
Incentives and expansion
“This partnership with CBAK marks a strategic milestone in our North American expansion. By localizing battery cell and pack production, we’re enhancing supply chain agility and aligning with U.S. clean energy policy incentives,” Feng Chen, CEO of Kandi Technologies, said.
“We are positioned to meet fast-rising demand in the off-road and recreational vehicle category, creating sustainable value for our shareholders.”
The companies have yet to finalize a location and are currently evaluating potential sites for the planned lithium battery facilities.
CBAK Energy is ramping up its production capacity, aiming to reach 7.6 gigawatt-hours by the end of 2025. As part of this expansion, the company is setting up new facilities in Southeast Asia, slated to become operational by 2026, in a move to mitigate geopolitical risks.
Market reports indicate that the North American market for UTVs, golf carts, and other off-road vehicles was valued at $16.7 billion in 2024, with projections reaching around $25.0 billion by 2030. The partnership is strategically positioned to tap into the growing battery demand of this expanding sector.