SHANGHAI/HONG KONG – Talks with China’s CATL/BYD regarding battery supply for their planned electric vehicle were largely stalled. The two sides refused to form teams or create U.S. facilities that cater solely to Apple Inc, three people familiar with the matter said.

People said that Apple had been informed by two firms in the past two weeks about their inability to fulfill its demands. According to one source, the U.S. firm hasn’t given up on its hope of restarting negotiations with CATL and BYD.

Chinese battery producers are far more skilled than competitors in developing lithium iron phosphate batteries (LFP). These are much cheaper to manufacture and source previously reported that Apple prefers this technology.

According to one person familiar with the negotiations, CATL is the No.1 manufacturer of batteries for EVs in the world. However, they are reluctant to open a U.S. facility due to the political tensions between Washington, Washington, and Beijing.

According to the source, the Chinese firm also discovered it difficult to establish a separate product-development team that was exclusively focused on Apple because of difficulties finding enough staff.

Two sources said that BYD has declined to construct a new factory or team for its iron-phosphate battery facility in Lancaster, California.

Apple is now considering Japanese batteries makers due to the stalled talks. It also sent people to Japan in this month’s March, it said.

According to one person, Panasonic Corp (OTC-:) Corp is one company that Apple is currently considering.

Because the discussions were confidential, sources refused to identify themselves. Apple, BYD (Panasonic), and Panasonic refused to comment.

CATL stated in a statement that it denies “the relevant information”.

The statement stated that “We are currently evaluating the possibility and opportunity of manufacture localization within North America”, adding that the company has an exclusive professional team for every customer.

Sources told Reuters last year Apple was aiming to launch an electric car by 2024 https://www.reuters.com/article/us-apple-autos-exclusive/exclusive-apple-targets-car-production-by-2024-and-eyes-next-level-battery-technology-sources-idUSKBN28V2PY. Apple has not made public its plans.

The stall in discussions comes at a time when U.S. President Joe Biden is seeking to make the United States a powerhouse in electric cars, setting a goal https://www.reuters.com/business/autos-transportation/biden-set-target-50-evs-by-2030-industry-backs-goal-2021-08-05 of having half of all new vehicles sold in 2030 electric.

Apple could be further hampered by delays in securing batteries supplies. Apple lost Doug Field last month, the chief of its vehicle project, and he has decided to go back to Ford Motor (NYSE.) Co.

Tesla (NASDAQ) Inc. Tesla has made some Model 3 cars and Model Y in China, using LFP battery from CATL. This week, the company said it would also be using that same battery chemistry abroad.

BYD and CATL use LFP battery technology to enhance their performance. LFP batteries offer a lower driving range and energy density than more costly lithium batteries which use nickel and cobalt.