Tesla secures the battery cell supply with CATL, the report reports

Tesla has allegedly secured a battery supply contract with CATL, China's largest battery manufacturer, to supply cells to Gigafactory 3 in Shanghai and potentially expand to other manufacturing facilities.

At present, Panasonic is the only approved battery cell supplier for Tesla's vehicles, but things are changing rapidly.

Since Tesla's inception, Panasonic has always been the car manufacturer's only vehicle battery supplier with the very small exception of a short-lived Tesla Roadster 3.0 battery replacement program.

Panasonic made cells in Japan and exported them to California for Tesla's Model S and Model X programs, while the two companies teamed up to make the Model 3 cells at Gigfactory 1[ads1] in Nevada.

In recent years, Tesla started using Samsung SDI and LG Chem battery cells for its stationary energy storage products, but Panasonic always had the exclusive contract to supply the car manufacturer with battery cells for its electric vehicles.

Now it is clearly changing.

Earlier this year we heard that Tesla signed a battery supply agreement with LG Chem for Model 3 produced on Gigafactory 3, and now it looks like they will share capacity with CATL.

We have heard since March that Tesla was in talks with CATL, but Bloomberg is now reporting that the two companies have "reached a preliminary agreement."

Bloomberg reports that the official agreement is not yet secure and is not expected to review until "mid-2020":

"After months of negotiations, the companies signed a no-obligation agreement after Tesla CEO Elon Musk resigned Shanghai in late August and met CATL chairman Zeng Yuqun for about 40 minutes, according to the people, who asked not to be named and discuss private deliberations, although a final agreement is expected to be signed by mid-2020, there is no guarantee that will happen, the people said. "

The" preliminary agreement "is for battery cells to be installed in Model 3 vehicles to be built at Gigafactory 3 in Shanghai, but they are also reportedly" separate discussions about a potential global supply contract. ”

CATL has expanded its reach lately and announced several new battery factories to support major car manufacturers.

The Chinese company signed a supply contract with the SAAB successor National Electric Vehicle Sweden (NEVS) to enable the production of hundreds of thousands of electric cars per year.

BMW also signed a $ 1 billion battery supply agreement with them to support their future EV production.

They have also secured a battery supply agreement with Honda for approximately 1 million electric vehicles.

CATL reportedly has a current annual production of 17.5 GWh and they are planning a new factory with a capacity of 24 GWh to come online as soon as next year.

Electrek's Take

It is interesting that within a few months to a year, Tesla could go from a single supplier of battery cells for its cars to having 3 and even probably make their own cells.

I still think Tesla plans to move into the battery cell production area in a big way next year, but it makes sense for the company to continue building a solid supply chain with other suppliers.

Tesla is going to need an incredible amount of battery cells over the next few years, and while I think most of these cells will be built internally in the long term, I think they will still be buying billions of dollars in battery cells over the years. next years.

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