CATL will supply ELMS with 42-kWh of lithium iron phosphate batteries using cell-to-pack (CTP) technology similar to that used in Nio's battery packs.

(Photo source: ELMS)

Electric Last Mile Solutions (ELMS), a NASDAQ-listed pure-play commercial electric vehicle (EV) company, said Thursday it has reached an agreement with Chinese power battery giant CATL to secure battery supplies.

CATL, which has about 50 percent of the power battery market in China and is a supplier to a large number of companies including Tesla, Nio and Xpeng Motors, will supply batteries for ELMS' electric commercial vehicles through 2025.

CATL will supply ELMS with 42-kWh of lithium iron phosphate (LFP) batteries using cell-to-pack (CTP) technology similar to that used in Nio's battery packs.

ELMS said the LFP cells offer high safety and reliability, as well as long cycle life, while the CTP technology increases the system energy density of the packs, simplifying production and reducing costs.

The move allows ELMS to secure battery capacity in an extremely challenging supply environment, said Rob Song, the company's Deputy Chief Financial Officer and Treasurer.

ELMS, a Michigan-based manufacturer of commercial electric vehicles focused on last-mile delivery, went public on the Nasdaq on June 28 through a merger with special-purpose acquisition company Forum Merger III Corporation.

The company's stock price has continued to weaken since the listing, and although it has risen in the past three consecutive trading sessions, it has accumulated a decline of more than 25 percent since the end of June.

ELMS began production of its flagship Class 1 Urban Delivery EV at its Mishawaka, Indiana facility on September 20 and already has 1,000 binding orders.

In addition to the battery supply agreement, ELMS and CATL's are expected to collaborate on battery localization in the US, according to a press release.

Data released earlier this week by the China Automotive Battery Innovation Alliance showed that CATL installed 8.87 GWh of power batteries in China in September, with a 56.5 percent market share, up 4.8 percentage points from 51.7 percent in August.