CATL establishes a battery supply agreement with Tesla

Chinese EV battery maker, Contemporary Amperex Technology Co., Limited (CATL), has confirmed that it has entered into battery supply agreement with Tesla.

According to a stock exchange filing by CATL, Tesla will purchase batteries from the company during the period between July 2020 to June 2021. The purchase volume for the batteries will be determined by Tesla according to requirements. The agreement does not specify any restrictions on the purchase volume.

Last week, Tesla had disclosed that it had reached an agreement with another battery supplier, LG Chem, for the supply at a smaller scale. The American EV maker has been traditionally sourcing batteries from Panasonic. These new agreements confirm the automaker's bid to diversify its battery supply.

Tesla has been gradually ramping local production of battery packs since late Q4 2019 at the Shanghai Gigafactory. The two new agreements are primarily aimed to secure stable battery supply at the Chinese site. Panasonic will continue to remain the sole battery supplier for Tesla in the US.

Tesla recently began rolling out Model 3s from its Shanghai Gigafactory. While the company has been constantly trying to ramp up production at the new facility, it plans to introduce production of the Model Y at the site.