Tesla announced it was partnering with China’s largest electric vehicle battery manufacturer CATL, according to local reports in China.

In what has been described as a “win-win” deal by industry insiders, CATL is set to become Tesla’s third supplier of batteries in addition to Japan’s Panasonic and South Korea’s LG Chem.

Tesla said more details about its collaboration with CATL would be disclosed in April, presumably after a formal agreement has been signed between the two companies. 

By signing up an additional battery supplier in China, Tesla reduced the risk of potential future supply shortages and also gains bargaining power.

Tesla began commercial production at its new car plant in Shanghai at the end of 2019 with the company reporting weekly production of the battery powered Model 3 had reached 3,000 units early in January.

It plans to introduce a second model at the plant, the Model Y SUV, next year.

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Tesla delivered 367,500 EVs globally last year, up around 50% on 2018 volume.

CATL already supplies a large number of domestic automakers and foreign joint ventures in China, including SAIC Motor, Geely, BAIC, GAC Group, BMW, FAW-Volkswagen, Mercedes-Benz, Toyota and Volvo.

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