Hyundai Motor has chosen a Chinese battery supplier for the first time, according to Chinese media reports.
Fujian-province based Contemporary Amperex Technology Co. Ltd. (CATL) will provide batteries for Hyundai's locally made plug-in Sonata sedans (China market introduction next year), according to a Xinhua news report.
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The Chinese government is planning a big rise in sales of electrified cars in China as it seeks to tackle air quality issues in its major urban centres.
Some analysts speculate that China will want to promote Chinese suppliers of electric vehicle technologies and components.
The move to source a key component with a Chinese supplier also comes as Hyundai sales in China have come under pressure due to a diplomatic dispute between China and South Korea over the deployment of a US missile defence system amid concerns over missile tests by North Korea.
"We selected CATL as our first Chinese battery partner as Hyundai seeks to diversify its supplier base," a Hyundai official told Xinhua.
China is aiming to become a world auto-making powerhouse in a decade, with Beijing aiming to boost development and output of new energy vehicles (NEVs).
The Xinhua news agency that by 2020, China aims to see NEV output and sales hit 2m annually, the plan said, four times the current level.
China sold 507,000 NEVs last year, the most in the world for a second year and up 53 % from 2015, according to the China Association of Automobile Manufacturers (CAAM).
