Tesla supplier CATL plans a major battery plant in Shanghai: Reuters

June 4, 2021 3:38 am

Tesla's battery supplier Contemporary Amperex Technology Co., Limited (CATL) is planning a major new automotive battery plant in Shanghai.

Details: The new plant will be able to produce 80 GWh of batteries per year, which would come on top of 69.1GWh in current production capacity and another 77.5GWh under construction, Reuters reported, citing sources familiar with the matter.

The plant is likely to be located south of Tesla's Shanghai factory in Lingang, Pudong New Area, said the report, adding it will hire 5,000 workers and manufacture cell-to-chassis (CTC) batteries.

CATL has been negotiating with the Shanghai Municipal Government on the construction of the factory, and it is not clear when a final agreement can be reached.

Establishing a plant in Shanghai will help the Chinese battery manufacturer to strengthen collaboration with Tesla since it aims to become the US electric vehicles (EV) maker's biggest supplier in the near future, said the report.

Citing a senior source at CATL, the report said the company plans to provide half of the battery cells Tesla uses globally in EVs and roof energy storage.

Context: The electric vehicle market continues to heat up, driving the growth of battery sales. As China's largest manufacturer of automotive lithium-ion batteries, CATL is also accelerating its deployment. The battery maker announced in February that it plans to invest up to 29 billion yuan (about $4.5 billion) to expand production capacity.

CATL signed a two-year deal to supply batteries for Tesla's Model 3 cars in February 2020. Its other clients include BMW, Daimler, Honda, Toyota, Volkswagen and Volvo.