Chinese electric vehicle battery maker Contemporary Amperex Technology ( CATL) has extend a battery supply deal with U.S. EV maker Tesla to 2025, the Ning-based company said in a stock exchange document on Monday.

Detail:

The Shenzhen-listed CATL said in a stock exchange filing that it renewed a partnership agreement with Tesla to provide battery packs for Model 3 sedans and Model Y sport-utility vehicle made in Shanghai Giga factory until December 2025.

CATL begun supplying lithium batteries to Tesla since February 2020, under the agreement that Tesla said it would purchase battery until June 2022.

The new agreement will extend CATL supplier relationship with Tesla by two years and six months. However, there was no detail with regard to the exact volume of lithium batteries that CATL will supply to Tesla.

CATL extended agreement with Tesla come at the time when the U.S electric vehicle makers is facing public backlash due to its sedan’s quality issues such as brake malfunction.

Chinese authorities recall about 285.000 Tesla vehicle in China amid malfunction of Tesla’s cruise control function that cause Tesla cars to accelerate suddenly.

Context:

Beside Tesla, CATL’s battery packs are used in many electric vehicles.

In August, 2020, CATL, Chinese electric car manufacturer NIO, the Hubei Science Technology Investment Group, and a subsidiary of Guotai Junan International Holdings, have agreed to set up a battery asset company that focus on offering battery as a Service (BaaS).

 Under the agreement, CATL supply the battery cells and the four parties hold 25 percent each with an investment of 200 million yuan. Instead of purchasing a car with battery, the joint venture lease client batteries through the BaaS service.

Baas enable people to buy a NIO car without the battery pack, which allows Nio to reduce its vehicle price and thus make its car more attractive to price sensitive clients.