Chinese battery maker Contemporary Amperex Technology (CATL) has signed a two-year battery supply agreement with Tesla, which is accelerating its localization in China.
The battery supply pact, effective from July 2020 to June 2022, will allow Tesla to decide its battery purchase volume based on its own needs, CATL said in a filing to the Shenzhen Stock Exchange on Monday.
CATL added that the agreement will not impose restrictions on Tesla’s battery purchase volume.
Last week, Tesla CEO Elon Musk said during an earnings call that his company had selected CATL and South Korea’s LG Chem as its new battery suppliers in an effort to diversify its battery supply chain. The U.S. electric vehicle maker also has a long-standing battery supply agreement with Japan’s Panasonic.
Tesla and CATL partnership discussions have been in the news for nearly a year. In March 2019, Tesla was reportedly in talks with CATL over using the Chinese company’s batteries to power the Model 3 sedans made at its Shanghai plant.
In January 2020, Tesla started delivering Model 3 sedans assembled at its Shanghai plant, which the firm aims to build into a 500,000 vehicle per year production capacity facility.
Contact reporter Ding Yi (email@example.com)