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Preliminary Battery-Supply Deal between Tesla and CATL reached

Preliminary Battery-Supply Deal between Tesla and CATL reached

As early as next year, Tesla’s car being manufactured in China will start using CATL as a battery supplier as per a preliminary agreement between Tesla Inc. and CATL, whose full name is Contemporary Amperex Technology Co. Ltd; with the hopes to scale up their relationship on a global level as per information provided by relevant sources.

The preliminary deal was agreed upon following months of negotiations. After a 40 minute meeting between Tesla’s CEO Elon Must and CATL’s Chairman Zeng Yugun in late August in Shanghai, a non- binding deal was clinched by the two companies. By halfway next year a final agreement should be signed as per sources.

Tesla’s factory near Shanghai which produces Model 3 cars will be using these batteries starting this year. What still remains are the minute details such as the quantity of batteries that Tesla will be buying from CATL. Additionally, for the global supply contract discussions remain pending currently according to sources. It was also revealed by one of the sources that in the meantime, the car manufacturer will use batteries from LG chem. Ltd. and Panasonic Corp.

In order to scale up in the world’s biggest car market, Musk is focusing his efforts to secure the costliest part of an automotive; its batteries. Amid the fluctuation caused in the import tariffs by the U.S.- China trade war, this move will help Palo Alto, California- based Tesla to depend less on imports. Not to forget, while talking about the building of a world-leading electric-vehicle ecosystem, Beijin is prioritized and this deal will please it very much.

Whilen trying to get comments from representatives of Tesla, none could be obtained. Similarly, CATL, Panasonic and LG Chem also refrained from any disclosure of the matter.

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