Year old rumours of a partnership between Chinese battery manufacturing company Contemporary Amperex Technology Co Ltd. And Tesla were confirmed as CATL announced a two year agreement with Tesla for supplying batteries for Tesla’s electric car production in China. The deal will be effective from July 2020 to June 2022, a period during which Tesla will be allowed to order batteries from CATL as per the demand in their Chinese production plant. The details were disclosed after CATL Reuters reported a regulatory filing by CATL on Tuesday.
The talks of CATL supplying batteries for Tesla’s first electric car made out of China, the Model 3s, date back to March 2019, with a preliminary deal also announced in last November. Prior to the confirmation of the deal, Panasonic was the only company to manufacture batteries for Tesla cars. With the deal now confirmed, Panasonic will expectedly stop supplying batteries for Tesla in China and the electric car makers will have to use the batteries supplied by Panasonic in the cars manufactured at its Nevada manufacturing plant. Tesla will also have the option to look up for another local supplier in Nevada and cut down ties with Panasonic entirely, a move that can hit the Japanese battery makers quite hard.
Talking about Tesla, the company continued to surprise the Wall Street with its phenomenal growth during a time when industries are hit badly due to the Corona virus outbreak in China. Tesla recorded a massive 12 per cent growth on Monday despite its factory in China halting production due to the outbreak. Investment firm ARK has even predicted that company’s shares could possibly breach the USD 7000 mark by 2024, almost ten times its current value of USD 728. Tesla has assured its investors that the shutdown in China won’t have a major effect.