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China’s leading electric vehicle (EV) battery manufacturer Contemporary Amperex Technology (CATL) said it had extended its supply contract with Tesla, sending its share price up by 3% to an all-time high on the Shenzhen Stock Exchange.

In a filing to the stock exchange, CATL confirmed its existing two-year lithium-ion battery supply contract with the US EV maker, which was due to expire in June 2022, had been extended until the end of 2025.

CATL said in a statement: “The agreement to extend the contract confirms Tesla’s acknowledgment of our product quality and production capability in power batteries and will help boost the long-term sustainable partnership between the two parties.”

Shares in CATL have surged by 58% since March, valuing the company at over CNY1trn (US$155bn), as investors recognise the huge potential growth in EV battery demand.

CATL supplies battery packs for most global automotive brands, including for the Tesla Model 3 and Model Y vehicles produced in Shanghai.

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By GlobalData

The company has invested heavily to expand battery production capacity, including CNY39bn to build three new factories in China last year.